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December 2020 | Platform

We are prepared for the future, and the future is now

"The times we are living in are filled with uncertainty and change, both on a personal level in our daily realities and undoubtedly in the economic and business sphere, due to the impact of COVID-19. The Spanish automotive sector is not immune to this reality. Over these months, we have seen how the entire supply chain has come to a halt due to measures taken to address the crisis worldwide.

Eight months have passed since the onset of the paralysis, and the sector is gradually recovering its activity, albeit unevenly across markets and clients. However, efforts are being made to progress steadily and decisively, aiming to minimize the anticipated losses in terms of production volumes and revenue by the end of this year. Automotive component suppliers are expected to experience an estimated 20% to 30% decrease in revenue, unprecedented figures in the sector's more than six decades of history in Spain.

Despite the challenges, prior to COVID-19, the sector was already undergoing intense transformation towards a more decarbonized economy, addressing the challenges of digitization, connectivity, and automation, all under the premise of sustainability. This health crisis has only accelerated the change process through geographic relocation of some vehicle components and systems to strengthen supply chains against potential future threats. Additionally, consumers now lean towards prioritizing private vehicle usage over public transportation for safety and protection reasons.

These data remind us that, even in an environment of uncertainty, we must act quickly, intelligently, and creatively to remain a competitive industry. Considering that automotive component suppliers contribute around 75% of the vehicle's value, it's evident that the competitiveness of this industry is a key driver for the transformation process.

 

We are ready for the future, and the future is now

 

We have a strong and consistent ecosystem comprising over a thousand automotive component suppliers and top-notch technological centers, a powerful attraction for vehicle manufacturers worldwide. For several years, the Spanish automotive component sector has been working on innovation initiatives, including alternative propulsion and fuels, more autonomous mobility, and advanced manufacturing.

Autonomous driving is unthinkable without new technologies such as high-performance computing, cybersecurity, artificial intelligence, sensors to monitor the vehicle's environment, and technologies for precise positioning. Therefore, it is essential to maintain and increase automotive suppliers' investment levels in R&D (more than 4% of revenue in 2019, triple the industrial average) while focusing on sustainable Industry 4.0. This involves empowering and training employees to meet the demands of digitization.

Sustainable mobility is another hallmark, with the commitment of the entire value chain. As outlined in the White Paper 'Contribution of the automotive component industry to sustainable development,' there are many initiatives and projects where automotive component suppliers are working towards achieving the United Nations' Sustainable Development Goals for 2030. For example, they support EU projects to promote the circular economy and the Circular Car Initiative, created as part of the World Economic Forum and officially launched in Davos in 2020.

We must not forget that what we need is action. We need to start working now to avoid falling behind as a country and as a continent. In such a competitive sector, the game is not only played here but also beyond our borders. We must maintain our leadership as the second-largest vehicle producer in Europe (the first in industrial vehicles) and the ninth in the world. Through the digital platform Autoparts from Spain, we promote the enormous potential of the Spanish offer of components made in Spain. All companies participating in this initiative are committed to the decarbonization goals set by the European Union and the high standards of quality, technology, and innovation demanded by vehicle manufacturers and spare parts distributors worldwide.

We are living in times that demand foresight and unity. Only then can we overcome this immense challenge, as we have overcome others throughout the history of Spain and Europe. Now more than ever, we must demonstrate that we can navigate this disruptive process with confidence, continuous work, consensus, and public-private collaboration. We have the elements; it's time to build the future we envision ambitiously, full of opportunities.

José Portilla, CEO of SERNAUTO (Spanish Association of Automotive Suppliers)"

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