At the last annual automotive industry meeting that we held at IESE at the end of last year, there was a sense of optimism that we hadn't seen for seven or eight years. The figures would justify it when we recently had the exact data . The increase in vehicle production was 9.3 percent, with an output of 2,163,338 units, including 1,719,700 cars, 11.7 percent more than the previous year. At the European level, the automobile industry, although on a recovery trend, suffered a small drop of 1.7%.

In our country it is always good news when a new model is assigned to one of our factories, and this has been happening. One can imagine the meeting of a management committee where it is going to be decided where a new model will be manufactured. There will be an operations director , a commercial director , a human resources director and a few others. Each will have discussed topic with their people. There will be managers from different factories, in different places, who will have said to their bosses: "Get me model such and such for our factory; we won't let you down; you know we can do very well with the people and equipment we have; we won't need much investment: besides, the models we are making, especially the so-and-so, are going to run out and if we don't bring in a new model in 2015, we will have to take people out and in two more years we will have to consider closing down". The session of the committee of direction will not be at all easy. And the explanations that will have to be given afterwards, even less so.

The continuous allocation of new models to Spanish factories for me is a test that the ethics in the decisions of the sector has improved a lot. Without a doubt, Spanish plants are the most competitive in Europe. And this is the merit of their management teams. But we do not have Spanish brands, and important decisions are made at the top level, at headquarters, and there may be a concern about which factories may be on the road to possible closure due to loss of competitiveness.

Why are we competitive? In Spain, adjustments have been made in most of the factories that have brought their costs to a very good level. Worker productivity is also good. The levels of training of the workers is also good and we have adequate training programs.

The good experience of middle management and management teams should be highlighted. And it must be recognized, but the Spanish unions have always had leaders in the automotive sector who have understood well the limitations of the sector, so that they have exercised their work of defending the improvement of the conditions, economic and operational, of the workers but within a rational framework .

The cost of the value chain
We have to bear in mind that the automotive sector is probably the one that has fragmented its value chain the most. We pick up the car from a dealer, which is an independent business . The car will have been taken by a specialized transporter who may even keep a certain stock of cars in a yard he owns. The manufacturer will have purchased the car's highly finished components and will have focused on assembling them. The suppliers supplying the manufacturer will have followed the same Philosophy, concentrating on some critical aspect of that component and buying the rest from sub-suppliers. And so on. This means that for every employee there are more than 10 suppliers or suppliers of suppliers, but also in logistics, technology, maintenance, training, different types of consultancy service, distribution, financing, advertising, design, and so on.

It is this complex and long chain that really determines the competitiveness of the industry. Sometimes you hear that Morocco or Romania are good places to manufacture cars because their labor costs are a small fraction of the cost in countries like Spain or others in Europe. Some have even fallen into the trap of moving manufacturing there. Then they have discovered that it is the total cost of the value chain that counts and not simply the cost of labor. If you don't have component suppliers nearby you need abundant stocks or risk having to shut down production. If you have to reprogram complex IT systems, train lots of workers with no industrial experience and rely on complicated logistics, costs soar. The automotive sector is perhaps the most advanced in establishing alliances with competitors to share components so that you collaborate in buying the same component from the same provider , but then compete to the death with them on the finished car.

Carlos Ghosn, president of the allied Nissan and Renault, recently stated that both brands will share a platform (the basic structure of a vehicle) in three million units produced in different plants between the two. Today we can affirm that in Spain we have a whole system, a complete and competitive "industrial infrastructure" in the automotive sector.

The Geneva Motor Show, one of the important milestones in the industry, took place recently. It has been well attended and more than one manager has been rewarded with the trip to Geneva as part of his reward for the improvement of area under his responsibility. It seems that the change in attitude of 2013, evolving towards optimism, has led the Geneva Motor Show to present slightly more whimsical novelties and particularly the prestige brands, such as the Ferrari California T, or the Lamborghini Huracan. Brands such as BMW and Mercedes expanded their market with models such as the front-wheel drive minivan for the former, or the Compact class S for the latter. Large-market brands have also presented notable innovations such as the Seat Leon Cupra, the Nissan Juke Nismo RS, the new Renault Twingo, or the Peugeot 308 SW. There are also new entrants such as Qoros, made in China but certificate for Europe. People are optimistic about 2014 and the coming years. Even the Japanese are coming out of their decade of total stagnation, helped somewhat by the devaluation of the yen, but they are starting to make notable profits. Good momentum across the board, no doubt. Let's see if we take advantage of it to further strengthen our good base and our prestige as an ideal infrastructure for the automotive sector.