Spain to Direct €3.7B in Funding to Support Auto Industry
Spanish Prime Minister Pedro Sanchez has announced a €3.7 billion ($4.2 billion) aid package for the hard-hit auto industry to promote the production and sale of cleaner cars. The funds will be disbursed by 2022 and will include cash from European recovery funds.
Part of this funding will be directed towards research and development. This sector will see up to €415 million aimed at reigniting innovation in the auto industry. Most factories were idled during Spain’s lockdown as demand for new cars plummeted and supply chains were disrupted. Innovation will be essential to getting these factories back to their full capacity, looking at alternatives to materials and parts that remain affected by supply chain disruptions.
The auto industry represents around 10% of Spanish gross domestic product (GDP) and 19% of exports. It employs 650,000 people directly and as many as 2 million indirectly.
The funds will also support:
- Aid to purchase new low-emission cars
- Industry loans and tax breaks
- Worker training programs
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Research and development is the engine of economic growth in an increasingly knowledge-based global economy, however more investment is needed to help boost human creativity, innovation and economic output.
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