A little more than a few hours since Wayne Griffiths, CEO of Seat, and Thomas Schmall, appointed Chairman of the Board of Directors of Seat last June, announced that the next Volkswagen Gigafactory for the production of batteries will be installed in Sagunto, under the seal of Seat.
This is great news for Spain (the factory will bring 3,000 direct jobs) and for Seat itself, which is experiencing a delicate moment with the arrival of the electric car. His role within the Volkswagen Group it may be changing, adopting a new role in the medium term. in an electric and connected future.
In 2019, Seat registered 574,100 units for the whole world. Record figures for the company. Three years later, the automotive landscape is completely different. Beyond the problems of shortage of semiconductors, electrification has become a fundamental piece for the sale of new models with the pressures of Europe on the table.
And this is where Seat has a problem. None of its models managed to sneak into the 25 best-selling cars in Europe in 2021. In fact, the Arona, leader within the brand, accumulated 106,900 registered units, almost 10,000 less than the BMW 3 Series, the last in that series. Its second best-selling model was the Ibiza, with 95,800 units. In third place, the Leon reached 87,700 registrations.
The Seat Arona has a starting price of 21,850 euros, according to the brand’s own configurator. The Seat Ibiza of access starts at 13,420 euros. They are simple vehicles, for daily use, with which you can make a long trip without worrying about autonomy and that do not have any type of electrification. Whoever wants one of the two models with an ECO label must fully opt for CNG, since its fuel tanks are barely 9 liters.
This point may be the least attractive for potential clients looking for a “green” vehicle and at an affordable price. The Dacia Sandero obtains the ECO label with its gas version but with a 50-litre petrol tank. The Renault Clio opts for the same strategy and for a price similar to the Arona, it has a hybrid version. The Ford Puma offers an ECO label in all its versions, except for the most powerful 200 hp.
All of them are direct competitors of Seat, above or below, and offer vehicles at relatively attractive prices and more ecological. The Volkswagen Group has a hole here in its offer. It doesn’t have small, affordable, hybrid vehicles (to a greater or lesser extent) that can compete on price. The first model of the conglomerate with a similar philosophy is the Volkswagen Polo, in twelfth position. Next up is the Volkswagen T-Cross, twenty-second. Neither of them has an ECO label, except for the CNG version of the Polo.
But, in addition, Seat has another problem. It is the general firm of the Volkswagen Group that less sells in Europe. In 2021, it placed 327,954 units, in sixteenth position on the continent. Far from Skoda, eighth with 585,361 units and, of course, very far from the first place of Volkswagen, with more than 1.2 million registered units.
A complicated lace
Due to sales volume and type of vehicle, Seat has a difficult position within the group. Its strongest models are the small and versatile vehicles that, however, will be the last to receive electrical mechanics. In fact, Griffiths pointed out at the press conference that “Cupra is not the end of Seat. Cupra gives a future to Seat and the future is electric. The future is Cupra.”
These words are a declaration of intent for Seat’s positioning for the coming years. To questions from journalists, Griffiths also pointed out that completely electric or highly electrified models of Seat are not expected for the next few years. In fact, the next great vehicle with these characteristics will be a new plug-in hybrid SUV (with a range of 100 kilometers in electric mode) and micro-hybridized versions that will come from Cupra. That is where this type of electrified vehicle will arrive first, ahead of Seat.
The reason is obvious. The industry is interested in selling electric SUVs before smaller vehicles. Due to technology, it is easier for a medium or large electric vehicle to be versatile enough on a day-to-day basis and be able to face a long trip. And, in addition, it is also easier to sell it at a higher price. The electric marketwhat is considered the future, at the moment is not intended for the typical customer of a Seat Ibiza or an Arona.
a new role
With this difficult situation, Seat has no choice but to reinvent itself. The company has made heavy losses in 2020 and 2021 (194.2 and 256.3 million, respectively) due to the pandemic and the crisis of the semiconductors and Griffiths has appealed to the unions before the press. “Our future is based on flexibility and the ability to anticipate looking for opportunities together. Transformation is the only way”, said the Seat CEO.
This is where the new role of the firm within the Volkswagen Group makes sense. The Sagunto battery factory is the first step in the complete electrification of the Martorell plant, which will be responsible for discharging the small electric cars of the entire Volkswagen group. It even maintains an external business route, providing this component to the Ford factory in Almussafes.
It is a plan that will take a few years. In fact, this complete electrification is set for 2025 and will force us to rethink what is done in Catalonia and for whom. Seat Components, the El Prat factory dedicated to gearboxes, has a hard way ahead, because they are systems that are eliminated with electric cars. However, Griffiths assures that they will find new jobs for his employees.
The new positioning of Seat within the Volkswagen Group is clear if we look at its electric models. Of Volkswagen, Audi and Skoda, it is the only brand that does not have a vehicle of this type, since it prefers to position itself in Cupra, adopting a more sporty character and where its potential clients can see with better eyes paying a higher price. “We will be a key player in this process and potentially eligible for future plans in Martorell”, Griffiths stressed.
The future of Seat goes through the small electric car, for them and for themselves. And, for this, it is necessary that the prices of this type of car go down and its autonomy grow. It is one of the most important challenges for the expansion of electric vehicles and part of it goes through their greater penetration in the market, something that the CEO of Seat has been emphasizing for a long time.
George is Digismak’s reported cum editor with 13 years of experience in Journalism