Many thanks to Jose Luis Criado-Perez (Mobility Consultant, Spain) for his contributions.
Chapter 1: Economic and business environment
Total population: 46.7 million (2019 est.)
Madrid (3.3 million, 2019 est.)
|Major cities|| |
Spanish (99%), Catalan (19%), Galician (5%), Basque (2%).
Source: Country Economy
|Unemployment rate|| |
14.7% (Q1, 2019), up from 14.45% (Q4, 2018).
Unemployment is historically high in Spain. The average rate from 1976 to 2019 was 16.52%. The all-time high was recorded in Q1 2013 (26.94%). The all-time low in Q3 1976 was 4.41%.
Source: Trading Economics
|Main industries|| |
Tourism, automobiles and vehicles parts, machinery, machine tools, chemicals, pharmaceuticals, textiles and apparel, food and beverages.
Spain’s tourism industry is the second-biggest in the world (after France), and the world’s most competitive. In 2015, Spain was the world’s third-most visited country. In 2016, 75 million foreign visitors spent time in Spain. That year, the tourist trade was worth about €77 billion – about 5% of the country’s GDP, employing around 2 million people.
In 2015, Spain was the world’s 8th-largest automobile manufacturing country, and Europe’s 2nd-largest (after Germany). In 2016, the industry generated 8.7% of Spain’s GDP, employing around 9% of the manufacturing workforce. Around 80% of the production is for export.
During the 2004-2014 decade, Spain’s agribusiness exports grew by 95%, thanks mainly to pork, wine (from 2013, Spain is the world’s major wine exporter) and olive oil (as of 2012, Spain produces about half of all olive oil worldwide). In 2015, Spain’s agribusiness accounted for 15% of exports and 3% of GDP.
|Interest rate|| |
|Fleet Maturity Index (scaling)|| |
|Political key info|| |
Spain is a Parliamentary Constitutional Monarchy
The country counts 17 autonomous regions with a high degree of self-government.
Since June 2018, the government is led by Prime Minister Pedro Sanchez (PSoE – Socialist Party of Spain).
Annual inflation rate: 0.8% (May 2019), down from 1.5% in April.
Source: Trading Economics
Chapter 2 : Automotive market, segments & sales
|Total Car park|| |
Total number of vehicles: 33,73 million (April 2019)
The average age of Spain’s vehicle fleet has increased by 50% over the past decade. At more than 12 years, it’s now higher than it’s ever been. Here is the age breakdown of the total Spanish vehicle fleet in 2019:
|New vehicle registrations (Cars, LCV, Trucks)|| |
Spain's new-car market suffered heavily in the wake of the 2008 financial crisis. Sales have made a strong recovery, but not yet to pre-crisis levels.
In 2017, the total number of new vehicle registrations was 1,749,157 units. (Electric vehicles: 12,853 units)
Market drop in August 2019 is biggest for that month since 2008
August 2018 was better than usual for the Spanish car market, as it was the month before the implementation of the WLTP standard. The market has been disturbed ever since.
Following a double-digit negative result in July 2019 (-11.1%), it dropped even further in August (-30.8%). It was the biggest relative decline for that month since the start of the credit crisis of 2008. There were just 116,686 registrations in August 2019, among which:
Year to date, the number of new-vehicle registrations in Spain has dropped by 9.2%, to 883,649 units.
|Top 5 brands (total market)|| |
Top 10 most sold car brands in Spain in 2018 (total market):
Source: Actualidad Motor
Brand top sellers in August 2019
VW (5,524 units, -17.6%)
Some of the smaller brands managed to show double digit growth, notably Mitsubishi (+41%), Suzuki (+46,3%) and Lexus (+32,9%).
|Model preference top 5 (total market)|| |
Top 10 most sold models in Spain in 2018 (total market)
Source: La Vanguardia
Top 10 most sold models in Spain in the first five months of 2019 (total market)
|Dealer network (including fleet dealer network)|| |
|Used car market/renewal cycle|| |
In 2018, 2.2 million used cars and SUVs were sold in Spain, a 9.2% increase versus 2017.
For every new vehicle sold in Spain last year, 1.7 used vehicles changed ownership.
Source: 20 Minutos
Tenure of first owner of cars is estimated at 7 years
Chapter 3: Company car market
|Total Fleet Park (company cars)/Fleet penetration in total fleet sales|| |
|Evolution fleet sales (last 5 years)|| |
|Top 5 fleet brands (fleet market)|| |
1. Renault (7.8%)
New LCV registrations for total corporate channel (2017):
1. Renault (16.4%)
New car registrations via ‘renting’ (2017):
New LCV registrations via ‘renting’ (2017):
Source: Corporate Vehicle Observatory – Estudios y tendencias de la Movilidad Corporativa 2018
|Fleet Model preference top 5 (fleet market)|| |
Top 5 car models for total corporate market (2017):
Top 5 car models via ‘renting’ (2017):
Top 5 LCV models for total corporate market (2017):
Top 5 LCV models via ‘renting’ (2017):
Source: Corporate Vehicle Observatory – Estudios y tendencias de la Movilidad Corporativa 2018
Chapter 4: Taxation & legislation
Get the complete analysis about taxation and legislation in the Fleet Europe Taxation Guide, developed in collaboration with PWC. Click here for more info
What are the different car taxes?
Following the registration of a car and its use on public roads in Spain several car taxes become due, namely:
- Registration tax
- Annual circulation tax
This excise duty (Impuesto especial sobre determinados medios de transporte) is payable when a new or second-hand car is registered for the first time within Spain for use by individuals or entities resident in Spain or in possession of an establishment in Spain.
Additionally, when a vehicle is used in Spain by a Spanish resident or established and a registration has not been applied for within 30 days (or 60 days under specific conditions) following the date of starting using the vehicle, registration tax also becomes due.
Certain vehicles are not subject to this excise duty (cars exclusively destined for the transport of goods or passengers or those used just for industrial, commercial, agricultural, clinical or scientific purposes, cars for disabled people, cars destined for defense/safety purposes, ambulances, certain types of vans/minibuses, cars under the tourist plate regime).
In some cases (e.g., cars destined to defense/safety purposes and ambulances), previous authorization from the Spanish Tax Authorities is required. For the rest, a declaration by the taxpayer that such vehicle is not subject to matriculation tax needs to be filed before the Spanish Tax Authorities.
Moreover, certain vehicles are exempt from this excise duty (taxis, cars for driver’s teaching, hire cars, diplomatic posts and international organizations, vehicles registered in another EU Member State rented to a supplier of another EU Member State as well, by individuals or entities resident in Spain, for a period not exceeding the term of three months, etc.) although prior authorization from the Spanish Tax Administration is normally required.
In principle, due by the person who has registered the vehicle in his name. Also, the person using the vehicle in the case of 30 days use with no registration applied for shall be liable for the tax.
The tax on registration of the car is based on CO2 emission of each vehicle (according to Law 34/2007 dated on November 15, regulating air quality and atmosphere protection) and depends on each Autonomous Region (however, general tax rates are established for the event that a certain Autonomous Region has not established such tax rates).
The taxable base concerning new means of transport shall match with the VAT taxable base (or equivalent tax) and in the absence of VAT taxable base it shall be calculated according to the total amount paid by the car’s acquirer, determined according to article 78 of the Spanish VAT Law’s rules.
For used cars, the taxable base shall be the market value of the car at the moment the tax is due. In case of used cars previously registered abroad, the market value will be reduced (if it is included in the price) by the residual amount of the indirect taxes in the case that the means of transport would have been considered as “first registered” in Spain if it were new.
In order to determine the market value, taxpayers will be able to use the prices approved by the Ministry of Economy in force at the tax point.
The tax rates range from 0% to 14.75%, although in Canary Islands they range from 0% to 13.75%. Emission shall be stated within a certificate issued by the car manufacturer/importer or the MOT (Technical Inspection Card or Roadworthiness Test) or any other official document issued in relation with the relevant car. Cars that produce less than 120 grams of carbon dioxide (CO2) per km will be exempt from registration tax, while those that emit more than 200 grams per km will pay 14.75%. There are two intermediate bands of 4.75% and 9.75% tax for cars of 120-160 grams per km and 160-200 grams.
No taxation on registration of cars is due in Ceuta and Melilla although special rules are foreseen in certain cases, when the car is firstly matriculated in said territories but subsequently moved to Spain or the Canary Islands. Special rules are also foreseen in case the car is firstly matriculated within the Canary Islands and subsequently moved to Spain.
Resale companies can recover part of the registration excise duty (in proportion to the car’s market value at the delivery moment) when they deliver cars outside Spain provided that:
- The cars will not come back to Spain (delivery outside the Spanish territory shall be definitive).
- Such delivery should be done within four years as from the car’s first definitive matriculation.
- A certificate of the car’s de-registration shall be needed in order to prove the delivery’s definitive character.
- The delivery of the car outside the Spanish territory shall be done as a consequence of a firm sale.
The recovery of the registration excise duty may be applied on a quarterly basis through the form 568 to be filed within the 20 first following days since the end of the relevant quarter.
This tax becomes due at the time the car is registered for the first time within Spain or the day following the 30 days period in the case of use with no registration applied for.
ANNUAL CIRCULATION TAX
An annual circulation tax (Impuesto sobre vehículos de tracción mecánica) becomes due on vehicles registered in Spain and suitable for circulating within public roads. The tax is payable to the town hall where the car is registered.
However, official vehicles of the Public Administrations or diplomatic and international organizations, ambulances, cars for disabled people, vehicles for the transport of passengers and agricultural vehicles are exempt from this tax. Other exemptions may apply as a consequence of international treaties.
The annual circulation tax is, in principle, due by the person mentioned on the registration form of the vehicle.
The tax rate is based on engine power for cars expressed in fiscal horsepower and calculated on the basis of the cubic capacity of the engine.
Power and class of vehicle. Cuota - Euros
A. Private cars:
Less than eight fiscal horsepowers 12,62
From 8 to 11.99 fiscal horsepowers. 34,08
From 12 to 15.99 fiscal horsepowers. 71,94
From 16 to 19.99 fiscal horsepowers. 89,61
From 20 fiscal horsepowers and over. 112,00
Less than 21 seats 83,30
From 21 to 50 seats. 118,64
More than 50 seats. 148,30
Less than 1.000 kilograms of payload. 42,28
From 1,000 to 2,999 kilograms of payload. 83,30
From more than 2,999 to 9,999 kilograms of payload. 118,64
More than 9.999 kilograms of payload. 148,30
Less than 16 fiscal horsepowers. 17,67
From 16 to 25 fiscal horsepowers. 27,77
More than 25 fiscal horsepowers. 83,30
E. Trailers and semitrailers pulled by motorvehicles.
Less than 1,000 and more than 750 kilograms of payload. 17,67
From 1,000 to 2,999 kilograms of payload. 27,77
More than 2,999 kilograms of payload. 83,30
Motorcycles up to 125 cubic centimetres. 4,42
Motorcycles from more than 125 to 250 cubic centimetres. 7,57
Motorcycles from more than 250 to 500 cubic centimetres. 15,15
Motorcycles from more than 500 to 1.000 cubic centimetres. 30,29
Motorcycles from more than 1.000 cubic centimetres. 60,58
In this respect, the Ministry of Finance establishes the basic tariffs (except for the Basque country) although the town halls have the power to add a multiplying coefficient (not higher than 2) and to establish different allowances (e.g., benefits depending on the car’s fuel or engines due to ecological reasons).
The tax is an annual tax. However, in case of registration of the car or removal of the car, the tax period is from January 1 to the date of this fact and the tax due (settled on an annual basis) is proportionally reduced.
Income taxes – taxable persons
For direct tax purposes, the costs related to vehicles (including non-recoverable taxes) are fully deductible either as depreciation or as operating expenses (such as maintenance) if the vehicles are used for business purposes and the relevant documentary evidence duly supports the related expenses.
In principle, the manner of acquiring a vehicle by a company is not relevant for determining the level of deductibility for direct tax purposes.
Spanish VAT at the standard rate of 21% is due on the import, supply or acquisition of cars.
The reduced VAT rate of 4% is due on cars for disabled people and special taxis for the transport of disabled people (in this case, prior recognition by the Spanish Tax Authorities is necessary).
In addition, diplomatic and international organizations are exempt from Spanish VAT on the acquisition of their cars although prior acknowledgement is required.
In general, VAT paid on the import or acquisition of a car would be deductible if the cars are bought exclusively for business use.
Should the car be used partially for professional activities and partially for private purposes, there is a presumption giving the right to deduct 50% of the VAT paid on the purchase, import, lease, and repair, including the purchase of spare parts and petrol. If a different apportionment is obtained and it can be proved, initial deduction will have to be regularized.
However, vehicles for the transport of goods or passengers, for commercial or sales agents, used by its manufacturers for testing, trials, demonstration or sales promotion purposes or used for vigilance services purposes, cars for drivers’ teaching, among others, will be presumed to be used 100% for business purposes.
For VAT purposes a hire purchase in Spain is a supply of goods.
Interest paid is deemed an exempt financial service and must not be included in the taxable amount for the hire purchase when separately shown on the invoice.
Regarding the taxable event, VAT due must be paid when the car is put at the disposal of the hirer/purchaser.
A lease agreement will be treated as a supply of services if there is no purchase option or commitment to exercise the purchase option. VAT is due on every lease quota.
Interest paid is deemed an exempt financial service and must not be included in the taxable amount for the lease agreement when separately shown on the invoice.
If, during the lease agreement, the purchase option is exercised, the transaction qualifies as a supply of goods at that point, (up to then, it is a supply of services) the taxable base being the residual value of the goods.
Likewise, in those cases where there is an original commitment to exercise the purchase option, the transaction qualifies as a supply of goods as from the beginning, the VAT being due at the time the good is put at the lessee disposal.
VAT due on private use of company cars
The private use of a car by an employee could qualify (depending on the way this is articulated) as a taxable supply of services, and the employer would then need to charge VAT onto the employee proportionate to the 50% of such private use, with the employer then having 100% right of deduction. Please note that this criterion is only applicable for VAT purposes.
As previously mentioned, should the car be used partially for professional activities and partially for private purposes there is a presumption giving the right to deduct 50% of the VAT paid, although if a different apportionment is obtained and it can be proved, then the initial deduction will have to be regularized (except vehicles for the transport of goods or passengers, for commercial or sales agents, used by its manufacturers for testing, trials, demonstration or sales promotion purposes or used for vigilance services purposes, cars for drivers’ teaching, among others, that is presumed to be used 100% for business purposes).
Company car in personal tax returns – benefit in kind
Private use of a company car by employees is deemed as a benefit in kind for Spanish personal income tax purposes. The private use should be settled on a case-by-case basis based on a reasonable criterion.
The company will have to make a payment on account to the Treasury on the fringe benefits paid to employees, at the employees’ general withholding rate, being the valuation rules the following:
Supply of the car to the employee (payment in kind), which becomes the owner of the car: acquisition cost for the entity, including the taxes (VAT, tax on registration, customs duty).
In case of use of the car by any title (but the employee does not acquire the car’s ownership):
– Cars owned by the company: 20% per year of the acquisition cost
– Cars not owned by the company (leasing): 20% per year on the market price of the car if it were new.
Use and subsequent supply of the car to the employee:
– Use: to be valuated according to the above
– Subsequent supply: the market price of the used car at the moment of first supply
Income taxes – drivers’ personal taxation
Private car in the personal tax return
The vehicle costs made in respect of the private use of a vehicle are not deductible in the employee’s personal tax declaration.
Use of company cars by employees for commuting purposes is considered as private use and thus a benefit in kind, subject to withholding tax (payment on account). In this sense, the rules above are fully applicable.
In case of use of employees’ own cars for business journeys, reimbursements by the employer not exceeding 0.19 EUR per kilometre is tax free and not subject to withholding tax. Amounts exceeding 0.19 EUR per kilometre are subject to withholding tax.
SPECIAL TERRITORIAL SCHEMES
Importation of cars into the Canary Islands coming from outside the EU is currently subject to customs duty at 10%.
Supplies of cars are subject to IGIC 13.5% or 9.5% (depending on the power), 6.5% (vehicles intended for specific uses and/or depending on certain technical specifications) or 3% (cars and taxis for disabled people).
Imports and supplies of hybrid electric vehicles that do not exceed 110 grams of CO2 per kilometre on their emissions, and electric vehicles, except sport or recreational vehicles and those driven on rails installed on the road, are subject to IGIC and shall be applicable a tax rate of 3%.
Input IGIC incurred on purchasing the cars will be only recoverable in case of cars used exclusively for the purpose of the purchaser’s business activity (or in case of specific vehicles such as those for the transport of goods or passengers, for driver’s teaching, etc.).
No presumption analogous to that existing in the VAT Law has been implemented for IGIC purposes up to date.
Ceuta and Melilla
Importation of cars within these cities will be subject to IPSI (tax on importation, services and production), as general rule, at 10%. For these purposes, in order to determine the taxable base of the IPSI on importation the same rules as for the calculation of the taxable base of the VAT on importation will be applicable.
Measures in this respect depend on each autonomous region. Royal Decree 294/2013, of April 26 and Royal Decree 1078/2015, of November 27, regulate granting of subsidies for the acquisition of electric and other alternative energy vehicles.
Additional regulations affecting the vehicle fleet
Following the provisions laid down in the National Plan for Air Quality and Atmosphere Protection (Plan Nacional de Calidad del Aire y Protección de la Atmósfera 2013-2016), Spanish traffic authorities have proposed to classify the vehicle fleet according to the level of polluting gas emissions and to place different labels within the vehicle fleet according to that classification.
The main objective of this classification is the positive discrimination of the most eco-friendly vehicles. In addition, it was designed to be an effective instrument for municipal policies, for instance, those restricting the traffic in high pollution situations.
At state level, the placement of these labels is voluntary. However, some city town halls (Madrid) have already established the obligation to affix these labels in order to restrict the access of the most polluting vehicles to certain city sectors.
The Spanish Government allows the use of the WLTP-NEDC correlated value until the end of year 2020 in order to reduce the immediate tax impact of the introduction of the WLTP regulations (for instance, the potential modification on the registration tax rate).
Chapter 5: Car policies
5.1 Company car entitlement
The title of the car lies with the owner – e.g. the leasing company, the corporate itself, or the employee.
In the case of mileage allowance or another type of car allowance for the private use of an employee, this is the only case when the title lies with the employee.
When a lease car driver lives in an area of the city with restricted parking, the city will require a document stating that he is the exclusive driver of the vehicle from the lease company in order to grant parking privileges.
Which sectors provide most fleet cars?
- Chemical and Pharma
- Transport and Communications
- Food, beverages and tobacco industries
- Utilities (electricity, gas, water, etc.)
- Maintenance and security services.
- Professional services
5.3 Job functions
Which job functions often include a company car? Company cars are normally offered based on two criteria: function and hierarchy. In this definition of the company car, we do not include LCVs.
- Related to function, sales forces and staff involved in commercial activities and customer care are the most common users of company cars. Professional services firms, where the service is provided at the client´s premises are also company car users.
- From the hierarchy criteria, top management of companies are normal users of company cars, more so in international companies and bigger local corporations.
5.4 Reference cars
Which reference cars are provided? The type of cars used for different levels varies significantly among industries. However, common examples of cars used for different levels are:
- Entry/junior sales level: Renault Megane, VW Golf
- Senior sales/management level: Opel Insignia, VW Passat
- Executive level: BMW 3/4 series, Audi 4/5, Mercedes-Benz C/E Class
Chapter 6: Funding methods
Since the arrival of full service leasing (called ‘renting’ in Spain) in 1985, its penetration has grown to the very dominant position that it enjoys today. The concept of outsourcing the fleet to a specialist has started initially with international and bigger national companies, but today it has spread to a lot of SMEs and even individual professionals.
Today, over 80% of the bigger corporate fleets in Spain are outsourced in full service leasing – and the share of full-service leasing in Spain is higher than in the EU as a whole.
Funding methods of commercial fleets (in Spain, 2017):
- Acquisition: 33%
- Automotive credit: 7%
- ‘leasing’ (i.e. finance lease): 19%
- ‘renting’ (i.e. full-service lease): 41%
Funding methods of commercial fleets (in the EU, 2017):
- Acquisition: 39%
- Automotive credit: 7%
- ‘leasing’ (i.e. finance lease): 26%
- ‘renting’ (i.e. full-service lease): 28%
The remarkable popularity of full-service leasing in Spain is of relatively recent vintage:
- Acquisition: 44%
- Automotive credit: 14%
- ‘Leasing’ (i.e. finance lease): 29%
- ‘Renting’ (i.e. full-service lease): 13%
- Acquisition: 43%
- Automotive credit: 17%
- ‘Leasing’ (i.e. finance lease): 28%
- ‘Renting’ (i.e. full-service lease): 12%
Automotive credit: 4%
‘leasing’ (i.e. finance lease): 14%
‘renting’ (i.e. full-service lease): 51%
- Acquisition: 34%
- Automotive credit: 9%
- ‘Leasing’ (i.e. finance lease): 20%
- ‘Renting’ (i.e. full-service lease): 37%
- Acquisition: 33%
- Automotive credit: 7%
- ‘Leasing’ (i.e. finance lease): 19%
- ‘Renting’ (i.e. full-service lease): 41%
Source: Corporate Vehicle Observatory – Estudios y tendencias de la Movilidad Corporativa 2018
It is worth noting that as a general rule, the bigger the corporate fleet is, the more likely the chosen method will be full-service leasing.
Full-service leasing is the preferred fleet financing method for 66% of Spanish companies with at least 100 employees. The EU average is 44%.
Source: Corporate Vehicle Observatory – Estudios y tendencias de la Movilidad Corporativa 2018
Financial lease is the most popular method for heavy trucks owned by transport companies. In these cases, the fleet is managed in-house.
All the international players in full-service leasing are present in the Spanish market, with the main international players (LeasePlan, ALD and Arval) as the top three local players. Other international players present are: Alphabet, Athlon, Northgate, Fraikin and Enterprise.
Not considering Athlon (Daimler Benz) and Alphabet (BMW) as real captives, the main captive companies active in the Spanish market are: VW Financial Services, Overlease (Renault), Leasys (FCA), Toyota and Hyundai.
Local banks have developed full-service leasing companies that have become relevant players in the past. However, many of them have exited the market or outsourced services to specialist. Main players among banks are Santander, BBVA, Sabadell and Caixa.
Players active in the market are members of the local leasing association, called Asociación Española de Renting, AER (www.ae-renting.es).
According to the AER:
- 134,795 new vehicles were registered for ‘renting’ in May 2019 – an increase of 9.18% over May 2018.
- The total ‘renting’ fleet in Spain amounted to 675,386 vehicles in May 2019, an increase of 13.33% over May 2018.
6.1 Outright purchase
Outright purchase of passenger cars and LCVs is not commonly used by bigger companies. It is used by smaller companies, especially when they experience difficulties accessing credit.
It is however, still the most popular system used by private individuals.
With outright purchase, both the ownership and the title of the vehicles are held by the individual or company buying the vehicle.
6.2 Finance Lease
Finance lease is the second most popular funding system used by companies to acquire car and LCV fleets, with 19% penetration.
It is however, the most popular method for the acquisition of heavy trucks and trailers.
With finance lease the ownership of the vehicle lies with the lessor, but the title and if applicable, the transport licence, lie with the lessee.
Finance lease contracts can only be offered by a regulated financial institution. Minimum term is 24 months and there is a purchase option at the end of the contract.
Business practice for contract terms are 36 to 48 months for light vehicles and 48 to 60 months for heavy trucks. The purchase option is usually nominal and equivalent to one monthly instalment or 1%.
6.3 Full-service leasing (operational leasing)
Full-service leasing, that in Spain is called ‘renting’, has similar features as in most EU countries.
Both the operational and the economic risk of the vehicle remain with the leasing company. Open-end contracts, like the typical US contract, are negligible in the Spanish market.
Full-service leasing includes funding, registration, M&R, taxes, road assistance, insurance and replacement vehicles.
A characteristic of the Spanish market is that full coverage insurance is included as part of the service in over 90% of the cases.
Fuel services are an option offered by most leasing companies, in competition with fuel companies.
Telematics, at different levels, is offered by most leasing companies.
Full-service leasing purchases of new vehicles represent 17.5% of the total sales of light vehicles. The distribution of fleets in full-service leasing, by type of company is the following:
Type of Client
% of Total Fleet
% Growth 2017/2016
6.4 Fleet Management
Fleet Management companies aim at providing a full outsourcing service of the fleet, with the exception of funding. However, fleet management companies do not offer bearing the operational nor the economic risks of the fleet.
Fleet management customers mostly lease their vehicles via multiple full-service leasing companies and hire a fleet management company as a ‘supplier manager’ as well as a fleet cost controller.
- fleet reporting consolidation, meaning consolidating the reporting tools of the various leasing companies
- invoice checking
- auctioning among leasing companies of new vehicle contracting, as well as
- analysis and consulting services.
In some cases, they offer a central point of contact for drivers, who are then redirected to the corresponding leasing company.
A fleet management company does not hold the property nor the title of the car, which lies with the leasing companies. Penetration of fleet management is low and even less so among larger fleets. It is not applicable for companies with a single supplier policy and most users are within the small and mid-size fleets with a multi-supplier policy.
6.5 Short-term rental
Tourism is one of the major industries in Spain and therefore, short-term rental is an important industry. Many short-term rental companies, especially the smaller ones based on coastal areas, have their focus on holiday rentals and not on corporate business. A car purchased on a short-term contract is exempted from paying the registration tax (see point 4.1). From a legal point of view, a short-term renting contract has a maximum duration of three months. If a vehicle is rented for more than three months to the same client, it would be considered a long-term rental contract and that vehicle would have to pay registration tax.
All international players are present in the Spanish market, like: Europcar-Goldcar, Avis-Budget, Hertz, Enterprise and Sixt. Most players offer long term rental on demand with various levels of proactivity and low penetration in their fleets.
Short-term rental companies are important partners of full-service leasing companies as suppliers of replacement vehicles for their fleets.
Also, short-term rental companies are clients of full-service leasing companies for funding purposes.
6.6 Other funding methods
- Novated lease: not been developed in Spain.
- Private lease: The definition of private lease in Spain would have to include autonomous professionals that use vehicles for professional and mixed professional/private use, as well as individuals that lease a car purely for private use. Leasing a car only for private use is purely a convenience- and service-related choice, as it has no fiscal benefit.
In the last few years, private lease has grown significantly and has become a growing market for the full-service leasing companies. However, it varies within lessors as their focus on this market varies.
In June 2019, Amazon and ALD have launched a joint initiative for private lease in Spain. Amazon.es has launched 'Motors', a digital store where customers can lease a car in a multibrand environment, and this entirely online. The credit risk assessment and back office services are delivered by ALD Automotive. ALD Automotive offers free doorstep delivery of the car and manages the lease for the duration of the contract.
Source: Fleet Europe
Chapter 7: Fuel
Fuel type segmentation
Like in most Western Europe, diesel has been the favourite type of fuel in Spain for many years.
New registrations (cars)
- 2016 was the first year where, due to environmental concerns, the share of diesel cars slightly decreased in new-vehicle registrations.
- In 2017, new diesel cars (48.3%) still outnumbered petrol cars (46.6%). Hybrid and electric vehicles made up the rest (5.1%).
- In 2018, the sale of petrol cars surged. They commanded 57.5% of the total market, with diesels only making up 35.8%. The share of hybrids and electrics had risen to 6.7%.
New registrations (cars+LCVs)
If we consider the full-service vehicles delivered to fleets in 2016, the breakdown by fuel type is as follows:
- Diesel: 190,000 (76%)
- Petrol: 51,000 (20%)
- Hybrid: 5,000 (2%)
- Electric: 2,500 (1%)
If we consider the almost 1.43 million new registrations of light vehicles (passenger cars + LCVs) during 2017, the breakdown by fuel type was as follows:
- Diesel: 795,000 (55%)
- Petrol: 575,000 (40%)
- Hybrid: 55,000 (4%)
- Electric: 8,000 (0.6%)
Total fleet (cars)
Out of the 23.7 million passenger cars on Spanish roads (December 2017), the breakdown by type of fuel was the following:
- Diesel: 13.5 million (57%)
- Petrol: 10.1 million (43%)
- Electric: 14,000 (0.06%)
- Others: 100,000 (0.4%)
Market share by fuel type evolution (Source: JATO)
Year Diesel Alternative Fuel Gasoline
2008 70% 0,3% 29%
2016 57% 2,5% 45%
2017 50% 4,3% 45%
Fuel Price Evolution
The evolution of the fuel price in Spain in the last few years have been as follows:
Current prices/litre (24 June 2019):
Euro 95: €1.295
Source: Fuel Prices Europe
Regarding the infrastructure in conventional fuels, throughout Spain there are over 11,000 service stations.
The main fuel suppliers are:
Repsol : 3,550 stations.
Cepsa: 1,520 stations.
BP: 630 stations.
Galp: 575 stations
Fuel card solution
All fuel suppliers offer fuel cars solutions with different levels of price discount for bigger fleets, which vary from 1% up to 4%. International fuel card suppliers, such as DKV, are present in Spain. Their penetration is higher in the heavy truck transport segment.
Full service leasing companies, normally in partnership with one or more fuel suppliers, also offer fuel card services as part of their product offering. Normally these type of cards offer more analytical and control tools for fleets.
Diesel continues to lose market share in August 2019
- Diesel: 20,223 units (-10 percentage points)
- Petrol: 44,065 units (59.2%, +3 percentage points)
- Alternative powertrains (EVs, hybrids, CNG, LPG): 10,202 units (+10 percentage points)
Chapter 8 : TCO components
Most important cost factors in TCO
TCO in Spain does not vary significantly in their components from the other EU major markets. However, seeing that the average fleet car is somewhat smaller than in other markets and the fuel cost for diesel is between 10% and 15% cheaper, its absolute figure is somewhat lower than in the major European markets.
The average purchase cost of a fleet car in Spain during 2017 was €19,000 (excluding VAT).
An average breakdown of the TCO components would be as follows:
- Depreciation: 37%
- Fuel: 23%
- Insurance: 15%
- Repair & Maintenance + tyres: 12%
- Interest: 7%
- Road Tax: 2%
- Management Costs: 2%
- Wear and tear: 1%
- Replacement vehicle: 1%
Maturity of TCO usage
No different from other major markets, TCO has become an essential tool for Spanish fleets when leasing a vehicle or choosing a full-service leasing company as supplier.
Because of last decade’s economic crisis, which hit Spain longer and harder than other EU countries, choosing lowest price has become the common practice. TCO (or rather, the lease instalment) is the defining criteria when choosing a lease supplier.
Interestingly – again, as in other major markets – companies who procure their fleet via the lowest bidder, do not follow up on TCO throughout the life-cycle of their fleet.
Chapter 9: Safety, insurance and telematics
Road traffic deaths in Spain
Thanks to a concerted effort by both the Spanish government and society (better infrastructure, heavier fines, a points-based driver’s licence, more education, etc.), the number of road traffic deaths has more than halved since 2006. The figure reached a record low in 2013 but has started creeping up again since then.
- 2006: 4,104
- 2007: 3,823
- 2008: 3,100
- 2009: 2,714
- 2010: 2,478
- 2011: 2,060
- 2012: 1,903
- 2013: 1,680
- 2014: 1,688
- 2015: 1,689
- 2016: 1,810
- 2017: 1,827
The number of traffic fatalities in Spain dropped by 26% between 2010 and 2017 – well above the EU average of 20%, putting Spain in 10th out of 28 places EU-wide.
In 2017, Sweden had the lowest number of traffic deaths per million inhabitants (25), Romania the most (99). The EU average was 49. Spain is doing much better than that, at 39. Not only is that a huge improvement over the situation 20 years ago, Spain also outperformed countries with better road infrastructure and a younger car park, such as Luxembourg (42), France (51) and Belgium (54).
Source: European Commission
However, the results are still mixed when separating results for urban and non-urban environments. The increasing use of two-wheeled transport (bicycles etc.) in cities has had an adverse effect on the death toll in those areas.
- Total number on non-urban roads: 49,000
- Accidents in cities: 50,600
- Total number on non-urban roads: 34,000
- Accidents in cities: 63,100
Insurance offers (calculation) and suppliers
There are over 50 insurance companies that offer car insurance services in Spain. This includes all major international companies, like AXA, Zurich or Allianz as well as the bigger local companies like Mapfre or Mutua Madrileña.
As well as these companies, bigger banks like Santander, BBVA or Caixa also offer insurance services.
As in most markets, car insurance is also offered online at discounted prices, which is especially popular in the retail market.
Fleets utilising full-service leasing generally use the insurance offered by their leasing companies, which besides being competitive, also greatly reduces the risk of controversial issues when returning the car. With several operators, insurance is a compulsory feature of the service.
Full-service leasing companies sometimes use a local insurance company as a partner. The international operators are generally self-insured for casco and have their own captive companies for TPL.
In terms of products, third-party liability (TPL) is compulsory in Spain. A full-coverage insurance is still very popular within fleets, normally with no deductibles but with a bonus-malus scheme.
Regarding telematics services, as in other markets, we should differentiate passenger cars with LCVs.
For LCV fleets, telematics is highly developed and many fleet users use it as part of their business operations. All major leasing companies offer these services, as well as independent suppliers, both local and international.
For passenger cars, the story is very different. Privacy regulations in Spain are very strict with the utilisation of data. Major leasing companies offer this service, and some are actually installing a telematics box in all registered cars and connecting it only when the clients accepts the service.
The actual use of telematics services in passenger cars is still quite limited to very basic data, due to these privacy regulations.
Chapter 10: Environment
Trends in taxation, legislation and city restrictions (CO2, diesel, …)
The registration tax on new cars is related to the level of CO2 emissions. This is not expected to change in the short term. The annual road tax charged by municipalities is also partially related to emissions.
Madrid was the first Spanish city to impose traffic restrictions when the level of pollution reaches a certain level. These restrictions are on three levels:
- 1st level, reduction of the maximum speed in the area contained by the city ring road (M-30) from 90 to 70 km/h.
- 2nd level, prohibition to park anywhere within the M-30 city ring (except for local residents).
- 3rd level, prohibition to access the city (within the M-30 city ring) to half of all vehicles, depending on the number of their registration plate. This prohibition is from 6.30 am to 9 pm. Exceptions: public transport, EVs, hybrids and vehicles for handicapped.
Further restrictions, introduced in November 2018, have succeeded in reducing the level of NOX by 38%.
Source: El Pais
Barcelona meanwhile is preparing to institute further traffic restrictions of its own. In December 2017, like Madrid earlier, the city inaugurated a ZBE – a low-emission zone – in which restrictions would come into force only when pollution levels were high.
From 2020, these restrictions will become permanent, irrespective of pollution levels (Monday to Friday, 7 am to 8 pm, with exceptions for goods transport, medical and emergency services, funeral and disabled transport). Vehicles that do not qualify for an environmental sticker from the DGT traffic authority, will be banned from entering the ZBE, which covers 95 km2, i.e. almost the entire city, plus four adjoining municipalities.
Barcelona city authorities calculate that about 50,000 vehicles will no longer have access, a drop of 7% in traffic.
Source: El Pais
From 1 September 2018, the application of WLTP test cycle results has had an important impact on emissions-based road taxes. Vehicle associations estimate the number of new cars subject to this carbon tax will increase from 25% under NEDC to 35-45% under WLTP. The rules for new cars:
- Emissions equal to or less than 120 g of CO2/km: exempt from the tax
- 120-160 g of CO2/km: 4.75% tax
- 160-200 g of CO2/km: 9.75% tax
- 200 g of CO2/km or more: 14.7% tax
Green vehicles (new powertrains)
The usage of hybrid vehicles has increased over the years. However, as the government subsidies are being reduced the decision to use a hybrid vehicle becomes more TCO-related. On the other hand, the offering by almost all OEMs of hybrid versions of their models has helped.
Electric vehicles enjoy a higher level of subsidies, but it is still unreliable as it is updated on a yearly basis by the government. EVs, besides economical subsidies, in most cities enjoy traffic privileges, like free street parking and permission to use the bus lane.
Spain’s EV market experienced a (relative) boom in 2018.
- Sales increased by 56% to 11,639 units, an average market share of 0.9%.
- In December 2018, plug-in EV sales hit a record 2,256 units, 126% more than in December 2017 and a market share of 2.3%.
Source: Inside EVs
The national figure for (zero-emission) EVs is 0.11%. That figure varies regionally, from a low of 0.015% in Cuenca province to a high of 0.38% in Madrid. Other high-scoring regions are Barcelona (0.16%) and the Balearic Islands (0.12%).
Source: El Economista
The main disadvantage, besides the economic ones, used to be the lack of charging infrastructure – but this is also improving rapidly.
The latest figures for charging points in Spain are (on 24 June 2019):
- Type 1 (SAE J1772): 29,666
- Type 2: 74,938
- Tesla Supercharger: 15,127
- Schuko (EU Plug): 14,297
- Tesla Dest. Charger: 7,911
- CHAdeMO: 6,854
Chapter 11: Mobility
Overall, traffic conditions are improving throughout the country. Public transport is a real alternative to private cars, especially in the major cities. And compared with other European bigger cities, public transport is quite affordable.
However, the centre of Madrid and Barcelona are over congested and there is a trend to increase pedestrian areas.
The increase of bicycle and scooters usage, both municipal and private has been very relevant. Due to its focus on micromobility alternatives, Madrid is now called the ‘European Capital of E-scooters’.
Source: Fleet Europe
The negative side has been the increase of traffic accidents in the cities.
Mobilty conditions for employees
Most companies that offer company cars are analysing alternative mobility solutions. However, the company car is seen as a real benefit by the drivers and there is a reluctance to let it go.
Major leasing companies offer plans to improve the mobility mix, however, they are seriously considered only when it can bring savings without annoyance of the employees.
Public transport in Spain is among the best in Europe and relatively cheap.
International car sharing operators are present in Madrid and Barcelona, but still with a very low penetration. The total number of vehicles of car sharing companies in the country is around 1,500 vehicles.
Carpooling and ride sharing are also present but are not relevant for corporate drivers.
The Uber case has been difficult in Spain. A big resistance by taxi drivers and a not very efficient positioning by the parties, has delayed its deployment. Presently an agreement has been reached but does not seem a win-win solution. Therefore, it is not a real alternative for mobility yet.
Every city politician likes to talk about smart cities, but reality is much slower. So far, the main city regulations to help pollution or congestion has been through restrictions. Very little has been done in an active way. We expect this to change soon… Public transport within cities will probably be a first step in autonomous driving usage.
Chapter 12: Key trends to watch
Future of fleet management
Being an efficiency-related service, outsourced fleet management will continue to grow in the next few years. However, its scope is presently increasing into mobility management.
Which level and type of services will be included, remains to be seen as technology and regulations develop. Some companies will integrate alternative mobility possibilities and will become the integrators of different mobility options. In these cases, other services like car-sharing, ride-sharing or car-pooling will become suppliers of the leasing companies. In other cases, it will be other way around; even though that seems less likely.
An interesting question is whether all these services will be provided to the drivers through their employers or directly. The answer is very much personal-tax related.
Driver´s safety has already become an important objective of fleet users. However, that still has to increase to a more pro-active level. From a technical point of view, the biggest leap in safety will be self-driving vehicles. But that will still take a while to becoming common on Spanish roads.
The mobility concept is relatively new in the fleet language, and therefore still means different things to different people. In Spain, mobility will continue to become increasingly hybrid.
As more mobility alternatives appear and as they get simpler and cheaper, there is only one certainty: we will move more. In my opinion, people will continue using their car when convenient; perhaps a car sharing system when downtown, also for convenience and to avoid parking costs; public transport when convenient and a taxi or Uber, also when convenient. And some people, will also use a bike when convenient…
Corporate driver behaviour will continue to be key in the safety and efficiency of any fleet. Policies will have to evolve to adapt to the new mobility realities. And driver satisfaction will continue to be an essential objective of any fleet.