Best Year Since 2007 Behind It, SEAT Looks Ahead

MADRID – A new 5- to 7-seat CUV bearing the badge of SEAT, Volkswagen Group’s Spanish subsidiary, will be assembled by the parent company at its Wolfsburg, Germany, headquarters.

Unions representing SEAT workers are not receiving the news well, but VW wants to take advantage of its MQB modular architecture and use it in building both the unnamed SEAT CUV and the Volkswagen Tiguan.

The new CUV, due to launch in 2018, will be larger than the current SEAT Ateca, also assembled outside Spain, in this case the Czech Republic. Luca de Meo, SEAT’s CEO, is happy with Ateca sales, which reached 24,000 units in six months on the European market.

De Neo also says during the SEAT management board’s presentation of 2016 financial results the automaker sold 408,700 vehicles in 2016, up 2.2% from 2015 and its best result since 2007, with more than 82% of production exported to markets outside Spain.

The new CUV, likely to be named for a Spanish village as are other SEAT products, are part of a broader marketing offensive. De Meo is looking for robust results from the fifth-generation

Ibiza and the Arona, a small CUV based on the Ibiza and due to launch later this year.

SEAT is continuing expansion into North Africa, specifically Algeria, and Mexico and Latin America.

In Algeria, the Spanish company wants to resume vehicle assembly there in the year’s second half and try to regain the sales momentum built up over several years’ time but was stopped last year when the Algerian government limited imports of foreign cars.

About 25,000 vehicles built at the Martorell plant, near Barcelona, will be exported this year as complete-knocked-down units to be assembled at a VW joint venture in Algeria that also builds Golf models.

After seeing initial success in the Mexican market, where the Spanish automaker sold 2,700 cars in January 2017, a 12.3% year-on-year increase, SEAT wants to penetrate other Latin America markets. The automaker for now will sidestep Brazil, not only because of a language barrier with the Portuguese-speaking country but because of the severe economic crisis under way there.

Until South American markets are targeted, De Meo apparently wants to focus on expanding in Algeria, Mexico and big European markets including Italy, France and Germany. SEATʼs export target is 30% of production and for now mature European markets give it the best chance of achieving that goal, De Meo says during his presentation.

SEAT sold 408,700 vehicles in 2016, up 2.2% from 2015 and its best result since 2007, with more than 82% of production exported to markets outside Spain.

Pretax earnings reached €903.2 million ($971 million) last year, well over the €6 million ($6.5 million) recorded in 2015. But the 2016 figure is distorted by the €671 million ($721.5 million) capital gain obtained from SEAT’s sale of its VW Finance lending subsidiary to parent Volkswagen Group.

Without such a capital gain, SEAT’s profit was only €232 million ($249.5 million). Operating profit was €143 million ($154 million), slightly lower than the €153 million ($164.6 million) announced days earlier by VW Group, the difference resulting from variations in accounting practices in Spain and in Germany.