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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...