As requested, I have examined the current market conditions and business settings in Spain that will hopefully provide you with the significant insights regarding the decision of initiating electric car manufacturing business in Spain. The Spanish automobile industry offers us lucrative prospects not only in manufacturing electric automobiles but also presents us with an opportunity to export our products to over 130 countries around the world.
Spain has a population of 46.4 million people and its GDP stands at $1199 bn. Spain’s GDP is 1.42% as percentage share of the World’s total (World Economic Forum, 2016). Like many other countries including the United States and Ireland, Spain also suffered from the recession in 2007; however, it is recovering at a very fast pace. Additionally, the automobile industry is the first to revive from the recession. There are more than 17 automobile manufacturing plants of 9 multinational automobile manufacturing brands including Daimler AG, Ford, General Motors, Renault, Volkswagen, SEAT and Nissan. Spain is the 8th largest automobile manufacturer globally and it is also the 2nd largest producer in Europe subsequent to Germany in both light and heavy vehicles In 2015, it produces a total of 2.7 million automobiles and the trend is growing with 2.8 million by the end of 2016 of which 90% of the vehicle were exported to 130 countries globally. The Spanish automobile industry stands as the largest in Europe and it is predicted to generate 8.7% of Spain’s total GDP while employing 9% of Spanish manufacturing industry. Another money-spinning factor is the established auto-parts industry in Spain, which involves approximately 720 business groups that are providing customized and fast services to automobile manufacturing plants. The industry has recently turned over €28 million, 60% of which accounts for exports. The figures are highly rewarding with utterly sophisticated business structure and highly supportive industrial policy that will support us initiating the manufacturing of electric automobiles (CIA World Factbook, 2016).
Business Settings in Spanish Automobile Industry
According to the Global Competitive Index, Spain is ranked 33rd out of 140 countries and scored 4.6 out of 5. The ratings of this index measured the macro and micro foundation of overall national economic competitiveness taking 12 major pillar into account including Institutions, Infrastructure, Macroeconomic environment, Primary Education and Health, Training & Education, Good Market Efficiency, Labor Market Efficiency, Financial Market Development, technological Readiness, Market Size, Business Sophistication, Innovation. The index reflects sound business settings and well-developed business infrastructures for foreign, as well as, local investors (Kochan, 2014). Similarly, the business structure in Spain is completely refined with feasible structures of licensing, business registration, accessibility to production factors and fully developed distribution, communication and transportation infrastructures. Apparently, the business conditions are stable and established and will facilitate us as a profitable framework (Manuela & Martinez, 2016).
Political Settings in Spanish Automobile Industry
Politically, there are two major parties that presently dominate the Spanish political arena i.e. Socialist Party and the Populist Party. Currently, the power is in the hands of Populist Party. The political condition is stable and offers a well-organized and corruption-free legal structure with effective regulations that control the economic and business activities thoroughly (CIA World Factbook, 2016). The Spanish automotive industry is also regulated by the stern CO2 emission guidelines, green manufacturing ratings, and taxes. The entire political structure is highly assisting in promoting exports and foreign investment, which will turn out to be worthwhile for our business startup.
On the basis of the information collected, we can enter the electric car manufacturing business in Spain while looking for the intensity of competition and entry barriers in the market that I believe can also be overcome through effective and vigilant business tactics and marketing strategies.
References
CIA World Factbook. Official Website. (2016). Profile of Spain. Retrieved From https://www.cia.gov/library/publications/the-world-factbook/geos/sp.html
Kochan, Anna. (2014). Spain - More Than You Imagine. Retrieved From http://search.proquest.com/openview/559fc7184b4c39c1594c9dd7630aa944/1?pq-origsite=gscholar&cbl=36873 on August 21, 2016
Manuela. P, Martinez. A. S. (2016). Management International Review42.3 Retrieved From http://search.proquest.com/openview/74d24c6c49b8168a8f397f896ee0ca19/1?pq-origsite=gscholar on August 21, 2016
World Economic Forum. Official Website (2016). Retrieved From http://reports.weforum.org/global-competitiveness-report-2015-2016/economies/#economy=ESP on August 21, 2016
