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Date Published: 11/11/2021
ARCHIVED - Shortage of magnesium exacerbates car sale crisis in Spain
The used car market in Spain fell by 17% in October
The automotive industry in Spain has been dealt another blow this week amid the ongoing saga of the world-wide supply crisis. Car sales have been on the decline in this country owing in large part to the economic impact of the pandemic, but more recently, to the huge production delays caused by the lack of semiconductors – essential microchips in most electronic equipment.
The latest issue lies with China, which has drastically reduced its export of magnesium, a fundamental element in the manufacture of automobiles. Although it is the eighth most abundant element on the planet, 95% of the magnesium supply to the EU comes from the Asian giant, which has taken the decision to interrupt production in order to reduce energy consumption in China.
In theory, there is still enough of the element in Spain to carry car manufacturers to the end of the year, but many companies are choosing intermittent stoppages to conserve their supply, according to industry sources. As a result of China’s decision, the price of magnesium imports is five times higher than usual.
Car sales in Spain
It’s not only the vehicle manufacturers that are feeling the pressure in Spain as the market for used vehicles has also plummeted in 2021, according to dealer platforms Ganvam and Faconauto. In October alone, 17.2% fewer passenger cars and SUVs were sold compared to the same period in 2020.
Conversely, and despite the fact that Spain has committed to outlawing petrol and diesel vehicles in the not-too-distant future, the sale of vintage cars is actually on the increase, with 56,696 cars over 15 years old sold last month, 35% of the total used car sales.
In a declining market, a marked increase in demand for cars aged between 5 and 8 years was observed in October, when sales rose by 2.3%. On the other hand, the sale of newer vehicles (less than three years), fell by 42.1%.
By fuel type, diesel cars are still coming out on top, accounting for 58.7% of all sales in October, followed by fully electric vehicles whose demand grew by 93.1% compared to the previous year.
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