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Car customization or “tuning” as it is commonly referred to among enthusiasts is a popular trend in Spain. Experts observe that car customization may be related to the recent economic crisis, since individuals are more likely to invest in “tuning” their current cars instead of purchasing a new one. U.S. trends highly influence the “tuning” subsector in Spain. Because U.S. companies are known for good quality and reliability, they are increasingly sought out by Spanish distributors and consumers of “tuning” accessories. Exhaust pipes, self-adhesive applications, and lighting and signaling equipment (including light-emitting diodes, or LEDs) are some of the most popular U.S. imports.
One third of Spain’s automobiles have been operating for over 10 years. With many outdated automobiles, there is a growing need for properly-equipped auto shops that can meet the demand for repair and maintenance services.
The rapid and steady growth of the automotive and aftermarket sector in Spain, combined with the solid reputation of U.S. automotive repair and maintenance equipment, should enable U.S. manufacturers to maintain and improve their position within the local market. Projections indicate that imports into Spain of automotive and aftermarket products from the United States will increase five percent over the next three years, as highly technical and computerized equipment (mainly diagnostic and electronic equipment) becomes a standard feature of repair shops.
Industry association representatives are optimistic about growth in the repair and maintenance equipment market despite the challenging economic climate. The aging of existing automobiles, stricter enforcement of government technical inspections, and structural changes aimed at market competition and consumption will encourage market demand for auto repair and maintenance equipment. These factors are expected to boost the total market size in the next few years and make it one of the most attractive sectors in the automotive industry.
Market Entry & Barriers
Market Trends & Demand
The most effective way to enter the Spanish market is to partner with a local company to act as the local representative. In such a competitive sector, establishing a partnership with a local company can help establish market entry and obtain insight to the local environment. Insurance companies have also taken advantage of the rise in the car customization market. The more a car is modified, the more money that has been invested in the car. Thus, insurance companies have created personalized plans for those with modified cars. In some cases, the insurance company covers repairs on modifications made to the car. This presents a barrier in the market because the popularity of the customization of vehicles may be reduce due to the risk of higher insurance rates.
market trends