'Baby brand' takes big steps to growth
09 April 2018
Author: Rachel Boagey
It's all about growth for Volkswagen's 'baby brand' Seat, which recently announced its 2017 figures at its annual media conference in Madrid.
Last year was one of records for the brand, with a turnover of £8.3 billion rising by 11.1%, the highest in its history, making it the fastest-growing brand in the EU.
As well as this, Seat's investments in R&D grew by £3.3billion during 2013-17. These successes mean that the brand is now profitable and can begin to invest 10% of its profits into the future, according to CEO Luca de Meo who met with BusinessCar at the event.
"These growth figures are representative of how much we and the group believe in this company," he said. "We can be happy with the 2017 results, but we shouldn't be satisfied. Together, we've closed a period of consolidation and now it's time to look to the future with the ambition to grow."
Part of the brand's moneymaking is due to its product offensive, which has seen the brand roll out many new vehicles recently and will see it launch one new car every six months until 2020. The new model offensive comes as a result of the highest investment figure since the Martorell factory was built in 1992.
The first new vehicles, announced by Seat at the conference, will be the Tarraco large SUV and the sporty Cupra Ateca, which are going on sale at the end of 2018. Next year will also see the arrival of the new-generation Leon in two variants - the five-door hatchback and ST estate.
From an industrial standpoint, Seat debuted the new MQB A0 platform in Martorell in 2017, with the launch of the Ibiza and the Arona. Together with the Leon and Audi Q3, which will be replaced by the Audi A1 at the factory in the second half of 2018, the two models have taken Martorell to 95% of the factory's current capacity. "The MQB A0 platform contributes to stability," said De Meo, "as it guarantees a high volume production output over the next ten years."
Holger Kintscher, Seat's executive vice-president for finance, also met with BusinessCar at the conference. "What is vital for us is to find the balance between volume and profit margin," he said. "We have found that now, and the new car offensive we have going forward will ensure we continue our success in Europe and become even more of a well-known brand."
Importantly, Kintscher highlighted that the brand is in a very strong position now to develop its future. "The big brands that are part of the Volkswagen Group are the frontrunners in new technologies, but we're participating in this far more now and getting the same technologies that they are getting," he said.
The manufacturer also announced that in 2020 a Seat electric vehicle will arrive, with a planned range of 311 miles. The car will sit on the Volkswagen Group's MEB platform and De Meo said it would be smaller than the large SUV that's coming soon. "It will be more in line with the size of the Leon," he said.
Kintscher said Seat's electric plans are part of the brand's mission to invest in alternative powertrain technologies to ensure it is ahead of the 2020 CO2 legislation.
At the conference, De Meo also revealed Seat will remain committed to vehicles powered by compressed natural gas, as well as conventional internal combustion engines, with a gas-powered version of the Arona small SUV set to launch this year.
Kintscher told BusinessCar, "We are heavily investing now, as a brand, to avoid fines in the future. For us, it's better to give the money to the customer than to Brussels."
Going forward, De Meo indicated that Seat's growth will be based on four pillars: "more brands, more markets, more cars and more energies".
He said, "2020 will be Seat's year of electrification, with the launch of a plug-in hybrid version of the new Seat Leon, as well as the brand's first fully electric vehicle, manufactured on the Volkswagen Group's MEB platform."