Seat risks its disappearance in a crucial meeting in Germany

BarcelonaThe Volkswagen Group's supervisory board will meet this Friday in Germany to decide on the biggest restructuring of Europe's leading car manufacturer. But, as a knock-on effect, the meeting could mark the future of the historic Spanish brand Seat, controlled by Volkswagen. The German group is considering eliminating the Seat brand "at the latest" by 2029, according to an internal document accessed by the German weekly newspaper specializing in economy and business WirtschaftsWoche.

"The Seat brand will be phased out in an orderly manner and with cost optimization, no later than the end of 2029, while ensuring care for existing customers – for example, service – and compliance with current obligations," states the report, approved by the entire Volkswagen Group board of directors, according to reports.

Reactions have not been long in coming. Seat indicated this Thursday that nothing has been decided. For its part, the company's works council has requested the involvement of the Spanish administrations to defend the historic Spanish brand, which has more than 70 years of history. According to some sources, the decision would only affect the Seat brand, not Cupra, which also depends on the Spanish company of the Volkswagen group.

The disappearance of the brand should not affect the Martorell plant either, which employs about 15,000 people. But the site would need to be equipped with new models if the Seat ones disappear. Currently, the Seat Ibiza and Arona models are manufactured in one line at Martorell, the León models (both Seat and Cupra) and the Cupra Formentor in another line, and the Cupra Raval and the Volkswagen Polo ID in another, the latter two being 100% electric. To maintain the viability of the factory – where more than 300 million euros have been invested for electrification – both the management of Seat and the works council have been asking the group for some time for the allocation of a second electric platform.

In fact, the Seat brand has not brought new models to market for a long time and, in recent years, has only presented updates to models such as the León, the Ibiza and the Arona. In contrast, the last few years for Cupra have been marked by the launches of the Formentor, the Tavascan, the Born, the Terramar and, the latest, the Raval.

The Seat works council considers it "unacceptable" that the historic Seat brand could disappear, and therefore calls on Spanish public administrations to prevent it. The president of the Seat works council, Matías Carnero (UGT), referred to the publication of the weekly WirtschaftsWoche.

Carnero recalled that Seat's electrification has required 10 billion in investment and that this plan has also involved public funds, which is why "if the brand were to disappear, someone would have to demand accountability from the German consortium". "If this were true, a plan B would have to be set up to find an alternative" to the hypothetical disappearance of the Seat brand, he told the company. In this context, Carnero has insisted on the importance of obtaining a second electric vehicle platform at the Martorell plant.

Matías Carnero is part of the Volkswagen group's supervisory board, having assumed this position representing the German trade union IG Metall. Carnero has assured that he will ask the group's executive committee for explanations regarding the veracity of this information, since if this news were real, it would mean "putting a target" on the Seat brand in a period of just three years.

For its part, Seat has stated that the Volkswagen group is undergoing a "profound transformation" in order to face the sector's electrification process, and therefore everything that affects the Spanish brand depends on the analysis made in meetings of the German group's supervisory board: "No decision has been made on this," company sources explained to Europa Press.

Future of Volkswagen

"The entire industry, including the Volkswagen Group and, of course, Seat S.A., is immersed in a profound transformation, based on our commitment to electrification. The global context has changed significantly, severely impacting the automotive sector, especially in the last year," company sources explained.

They add, in this sense, that Volkswagen is working on a business transformation plan for the entire group to strengthen its competitiveness and efficiency and that the goal is to make the entire group "and its respective companies more efficient and agile, and also to systematically take advantage of potential technological synergies".

This strategy is being debated in different supervisory board meetings, but, according to Seat, no decision has been taken on this yet: "We will inform of any strategic decision that affects Seat S.A. when the time comes," the company maintained.

In fact, on the supervisory committee's table there is already the possible closure of four plants in Germany (three from Volkswagen and one from Audi), as well as the elimination of at least 40,000 jobs in the country, within a restructuring process worldwide that could lead to the elimination of more than 100,000 jobs.