The off-highway segment amounts to a sizeable turnover in Spain, where the manufacture of machinery and equipment revenue had steadily grown until the COVID-19 pandemic before dropping to some 20.6 billion euros in 2020. Portugal's machinery and equipment manufacturing industry, smaller than its neighbor’s, reported a similar shift. In 2020, its turnover dropped to nearly 2.65 billion euros. Both countries have been grappling with the same market disruptions faced by the global automotive industry between 2020 and 2022, including the acceleration of the automotive chip shortage, the changing demand for road freight, and the truck driver shortage.
External challenges shape the industry
Road freight was a cornerstone of the Spanish freight transport services. In 2020, it amounted to 95.9 percent of the total inland freight transport in the country, compared to 85.8 percent in Portugal. This represented around 242,600 and 24,200 million tonne-kilometers of freight transported in Spain and Portugal in 2020, respectively. Road-freight demand dropped in both countries amid the COVID-19 pandemic but recovered in 2021, increasing the need for commercial vehicles.Both countries also are contending with the European emission standards aimed at reducing the carbon dioxide impact from vans and heavy-duty vehicles. However, Spain and Portugal's alternative fuel commercial vehicle market remains relatively small. Diesel was the primary fuel type of the heavy commercial vehicle fleet in Portugal in 2021, and battery electric heavy-duty options remained rather unpopular that same year, except for heavy passenger vehicles. In Spain, light commercial vehicles represented the commercial vehicle segment with the most sales of new energy vehicles in 2021, with non-rechargeable diesel hybrids and liquefied petroleum gas vehicles holding most of that market. Most heavy-duty industrial vehicles using alternative fuel were powered by compressed natural gas.
National markets dominated by European brands
Portugal has a smaller commercial and off-highway vehicle market than Spain due in part to its geography, economic size, and infrastructure. At the end of 2020, Portugal recorded 14,325 kilometers of roadways, most of which were main or national roads. In contrast, Spain reported an estimated 666,522 kilometers of road in 2019, with secondary or regional roads and other road types as the leading segments. Despite these differences, both countries are dominated by French brands in their light commercial vehicle market. Peugeot was Portugal's best-seller, at over 4,000 sales in 2022, followed by Renault and Citroën. Renault topped the sales in Spain, with nearly 19,100 vehicles sold in 2022, while Citroën and Peugeot were second and third best-sellers that year. European brands also dominated the heavy commercial vehicle segment in both countries. Volvo and Mercedes-Benz were the 2022 best-sellers in Portugal, while Iveco and Mercedes topped the 2022 industrial vehicle brand ranking in Spain.
