The uncertain future of the Seat brand

BarcelonaIt was the year 1948 when the National Institute of Industry (INI), the Italian manufacturer Fiat and a consortium of Spanish financial entities led by Banco Urquijo agreed to collaborate on the creation of a vehicle plant in Barcelona. Two years later, in 1950, the birth of the Spanish Society of Tourism Automobiles (SEAT) would be signed before a notary, which would later become the industrial giant of Catalonia.

As explained by the professor at the University of Barcelona Jordi Catalan Vidal, a specialist in the history of Seat and the automotive industry in Catalonia, this arrival, however, was complex. According to his research, during the 40s, once the Civil War was over, Fiat intended to return to the Iberian Peninsula. Previously, the Italian company had already had a plant in Guadalajara, which had not quite worked out due to the lack of industrial tradition in the area. For this reason, when they decided to return, Catalan recounts that Fiat sent engineers to Madrid as well as to Catalonia and the Basque Country. The reports ruled out the option of Madrid and pointed to Barcelona or Euskadi as the ideal places to settle.

This did not go down well with the Franco regime, which rejected the Italian company's first proposals to settle in Catalonia. But in 1946, the National Company of Trucks SA (ENASA), famous for manufacturing Pegaso trucks, was founded in Madrid. Its creation, as explained by the UB professor, helped to unblock Fiat's proposal to settle in Barcelona; Madrid already had its vehicle plant. In 1953, the first vehicle came off the Seat assembly line.

One of the keys to the pact sealed by INI and Fiat was the obligation that a minimum of 90% of the components that would make up Seat cars would be made in the State. "This meant brutal industrial ripple effects," explains the professor and expert on Seat, who adds that, previously, there was already a certain network of professionals in the sector in Barcelona thanks to the automotive companies installed in Barcelona before the Civil War, such as Hispano-Suiza or Ford Motor Ibérica. With Seat, however, component companies grew even more in Catalonia.

The total expansion of Seat arrived in 1957, when the Catalan brand launched the 600 on the market, a popular vehicle much cheaper than those that had been on the Spanish market until then. "With the 600, the middle classes were able to own cars; many were sold," explains Catalan. Thanks to this model, Seat became the company we know today: the largest industrial company in Catalonia.

Years later, in 1980, coinciding with the arrival of competition in the State, Fiat left Seat and transferred its share to the INI. After a few years of collaboration, Volkswagen would end up taking over the Catalan company in 1986. Within the Volkswagen group, Seat became strong as a high-volume brand, a market position it began to share with the Czech company Skoda once it joined the German group in 1991.

The group's problems

Currently, the Seat brand is in the midst of a transformation of the automotive sector in Europe. The Volkswagen Group has announced a restructuring plan that intends to reduce its production volume by 25%, and also lower its model offerings by up to 50%. The proposal from the Lower Saxony group also involves closing plants in Germany and cutting up to 100,000 jobs worldwide. As of today, the entire German consortium has more than 650,000 employees.

The Volkswagen crisis is explained, above all, by the appearance of Chinese competition and the shift towards electric models. While at the beginning of the century China decided to bet everything on research into making batteries, the German group – like the rest of the sector in Europe – left the electrification process in the background. And that opened a gap that Chinese manufacturers have known how to exploit to the maximum.

As explained by the Catalonia Automotive Industry Cluster (CIAC) in a meeting with journalists this week, the current cost of manufacturing batteries for European electric cars is 30% higher than that of Chinese batteries. Regarding complete cars, the difference between the two rises to 40%. Sources from Seat explain to Empreses that they also suffer from this difference, and that this makes it very difficult for them to compete on price. Currently, electrified cars from Chinese brands are sold at much cheaper prices than European ones.

The group has also suffered a very sharp decline in the Chinese market. Until a few years ago, Volkswagen was the clear leader in the Asian giant's market, but the emergence of major Chinese brands has rapidly overturned its dominance. In fact, during the first half of 2026, the drop in its sales in China fell by up to 25.9%.

Seat in the market

Another of the circumstances that currently sideline Seat is its entry into the international market. Currently, the Catalan brand's cars are selling, and a lot. Especially in Spanish territory, where month after month they continue to appear at the top of the registration rankings. The Seat Ibiza and Arona are two of the most popular cars among Spanish drivers. The Leon is too, but it is a model shared with Cupra, Seat's sister brand.

But outside the country's borders, its models have less appeal than, for example, those of Skoda, Seat's great competitor within the group. This situation in recent times has led to the Czech brand growing within the German company and becoming the main one in terms of high volume. Seat, on the other hand, has gradually been losing models for the benefit of Cupra, which has been gaining weight, despite being a firm with a more premium approach and which provides the company with a larger margin for each car sold.