Volkswagen's SEAT brand is going to be given one last roll of the dice, with plans to expand its model range and grow the brand beyond its current limited market within five years.
SEAT is currently Volkswagen's most unprofitable brand and analysts predict it will be difficult to turn around, particularly with Greece’s fiscal crisis affecting the Spanish economy, but CEO James Muir, has faith in SEAT and is willing to give the company one last chance.
“This is the last attempt for SEAT as a brand, it would not be sensible to view things differently. If one would want to get rid of SEAT, one would have to give the other party money to take it,” CEO James Muir told Automotive News.
SEAT's first-quarter operating loss of US$139 million doubled Volkswagens other unprofitable units, Bentley and commercial vehicles.
Sales of Ibiza, which traditionally makes up 56 per cent of SEAT's sales, as well as Alhambra minivan fell 8.5 per cent to 337,000 units last year on the back of an overall 21 percent car sales slump for Spain in 2009.
With Spain’s economic woes rising, SEAT's proposed turnabout could hamper VW’s plans to surpass Toyota to become the largest automaker by 2018, if the economic situation does not improve.
Volkswagen, which also owns Audi and Skoda, aims to double SEAT's sales to 800,000 vehicles. Muir acknowledges that it will take more than cost cutting to revive the SEAT brand at Volkswagen.
“Our clear focus over the next three years will be to improve utilisation. One cannot solely rely on cost reductions to make Seat profitable,” says James Muir.
Volkswagen Australia has previously said there are currently no plans to bring SEAT down under.
Source: Automotive News