MASS MOTORISATION IN SPAIN

Journal of Transport History, The, Sep 2006 by Volti, Rudi

In 1965 Spain's ratio of 25 automobiles per 1,000 persons was lower than many Third World nations' today.1 Yet by the beginning of the new millennium the situation had changed dramatically. In 2000 Spain's 17.5 million private automobiles produced a ratio of 442 cars per 1,000 persons, slightly less than the average for the European Union as a whole (469) but greater than the Netherlands (411) or Great Britain (419).

This expansion of car ownership did not take place in a political vacuum.2 Until the late 1970s an authoritarian State's commitment to a policy of economic self-sufficiency motivated the creation of an indigenous automobile industry. The mass production of automobiles began in 1950, when a government agency, the Instituto Nacional de Industria, sponsored the creation of the Sociedad Española de Automóviles de Turismo (SEAT).3 The Spanish government used SEAT as a basis for further industrial development by mandating the maximum use of locally produced components. This requirement helped to spur the development of a supplier industry, but at the expense of high production costs and poor product quality.

By the mid-1950s the government began to relax its autarkic policies in the face of mounting economic and social pressures.4 One consequence was the establishment of automobile factories by several foreign firms. At the same time, however, governmental involvement continued in the form of price controls, high taxes, tariff barriers and the regulation of credit purchases. The death in 1975 of Spain's autocratic ruler, Francisco Franco, was followed by the restoration of democracy and the drafting of a new constitution in 1978. The economic liberalisation that accompanied democratisation opened up the market to foreign competition, a trend that was strongly reinforced by Spain's entry into the European Community in 1985.

The growth of automobile ownership

The social disruption that followed Spain's transition from dictatorship to democracy had significant short-term economic consequences, which in turn led to a temporary decline in new car purchases. But sales generally trended upwards (Figure 1).5

While sales of new cars were growing during this period, so was the population. Even so, the increase in the number of cars relative to the Spanish population is quite impressive (Figure 2). One explanation for the steady increase in the automobile fleet is the growth of personal incomes, as can be seen by depicting incomes and the acquisition of new cars on the same graph.

The strength of the relationship between per capita incomes and new car purchases can also be demonstrated through the use of a Pearson correlation coefficient, which shows an impressively high correlation of 0.886 at p = 0.01.

This close association between income growth and increases in per capita income has led some economists to assign a numerical value to the relationship by reckoning that the income elasticity of automobile ownership is about 2. That is, each percentage increase in household income results in an increase in the automobile population that is twice that percentage.6 This may be an example of false precision, at least as far as Spain is concerned. The loose coupling between yearly changes in income and new car purchases can be seen in Figure 3. An elasticity of 2 would show up as a horizontal line passing through the y axis at 2. There have been a few years when elasticity was indeed close to this number, but they have been the exceptions.

There are several reasons that changes in income and new car purchases have not moved in lockstep. For one thing, increases or decreases in income will not immediately be followed by changed patterns of car purchases; a time lag of uncertain duration will usually be present. Other factors such as shifting government policies, the distribution of income gains and fluctuating interest rates also will intrude on the relationship between income and automobile purchases, but the essential relationship seems clear enough.

As a final point about the connection between income and automobile purchases, it is noteworthy that while total automobile registrations have mirrored changes in per capita income, there was no significant increase in automobile ownership when average incomes reached a certain threshold; overall, the process of new car acquisition has exhibited considerable yearto- year perturbations as the general trend of automobile ownership has moved upwards.

Population density and car ownership

Although income is the chief determinant of automobile acquisition, several studies have noted the effects of rural versus urban residence on the growth of automobile ownership. With regard to the United States, it has been pointed out that automobile ownership was initially an urban phenomenon, but after the first decade of the twentieth century this pattern reversed abruptly, and by the 1920s per capita car ownership was higher in the countryside as people eagerly acquired automobiles as a way of overcoming rural isolation.7 The same pattern appears to have held for Canada; during the first three decades of the twentieth century the agrarian and lightly populated province of Saskatchewan ranked second or third among all provinces in the ratio of cars to people, the level of ownership being particularly high in the rural areas.8 In contrast to the North American experience, many European countries exhibited a rate of automotive diffusion that was slower in the countryside than it was in cities and suburbs.9 We are therefore left to wonder if the Spanish experience of mass motorisation has tended to reflect the 'North American' or 'European' pattern.