Overview of the Automotive Industry in Portugal

The automotive industry provides an excellent example of Portugal’s industrial capabilities.

The industry generates more than 6.6 billion Euros a year (including 4.1 billion in components) and currently employs more than 45.000 workers in about 160 companies. Estimated growth over the next two years is 16 percent.

Modernization of the industry

Portugal's pre-1983 automotive industry consisted of little more than a few plants doing rudimentary assembly work to satisfy local content laws. But then Renault built an integrated plant for manufacturing vehicles, engines and transmissions that began training a nascent industry on global competitiveness. Officials at Intelli, a government-sponsored think tank that studies and promotes the auto industry in Portugal, view Renault's investment as the beginning of the modern era of vehicle manufacturing in their country. They also say that many of the best Portuguese suppliers at work today were trained by Renault. However, though Renault provided an anchor for the sector's growth in the 1980s it has since moved on. The current dominant player is Volkswagen's AutoEuropa plant, which opened in 1993 and produces fully half of all of the vehicles made in Portugal.

Manufacturers including VW, Mitsubishi, Opel, Toyota and Citroën assemble more than 240,000 cars a year in Portugal. More than 80 percent of Portugal's vehicle production is exported to other European countries.