We were already aware that Volkswagen was looking for a new role for SEAT in its conglomerate of automotive brands, but it is always striking to hear first-hand how the company itself prefers to take a step back, leave Cupra as the reference firm and move to a background.
without prominence. In just a few years, SEAT has gone from experiencing a dazzling renaissance at the hands of Luca de Meo to giving up all kinds of prominence and taking a step back. In 2019, the firm broke its sales record with 574,100 units registered for the whole world. The new Seat León, Ateca and Arona had been liked.
Three years later, all traces of this impulse have disappeared. The pandemic and the microchip crisis have hit SEAT like no other. In 2021, none of its models managed to sneak into the 25 best-selling models in Europe. Everything achieved has been devoured by Cupra.
“It is the future”. These are words spoken by Wayne Griffiths, CEO of the brand, during the results presentation of SEAT. The moment could not have been more propitious and the declaration could not have been more evident. Shortly after, the announcement of new models for Cupra would arrive, all of them highly electrified. “Cupra is not the end of SEAT. Cupra gives Seat a future and the future is electric. The future is Cupra,” Griffiths stressed in March.
Since then, SEAT’s offer has been a desert. Its range hardly has versions that bear the ECO sticker, which could be especially attractive in its lower ranges, even if it were at the cost of positioning the Seat Ibiza and Arona as 48-volt hybrid models. A decision that comes after adding heavy losses in 2020 and 2021.
Powering Skoda. The decision to relegate SEAT to a second (when not third) level seems to have been made. According to Coach, the bad numbers of the firm have caused the Volkswagen Group to prioritize its competitors when delivering chips. Skoda has been the company that has gained the most from this decision.
Both firms have always competed in a market for simple vehicles with attractive prices, but obviously with little profit margin. Skoda, however, has a plan based on electrification long-term. They already have the Enyaq iV and a new model. At SEAT there is no news of any kind in this regard.
An audience that no longer exists. To Coach’s question Regarding the future of the brand, the company itself has put Cupra ahead, assuring that they are models with a higher profit margin and making it clear that it plays in another league: “SEAT has a clearly defined role in the Volkswagen Group: its customers are about 10 years younger than average.
The problem is that this public no longer exists. The buyer of a new car has, on average, between 40 and 59 years old. The next age bracket for people interested in buying a car is 60 years old. Barely 6% of those under 25 years of age consider buying a car. Between 23 and 29 years old (Seat’s target audience according to the brand), barely 12% consider owning a car.
The disaffection for having a car in property has a lot to do with the low salaries of the public to which it is directed. We are facing an age group that increasingly has fewer flats ownedbecause they can’t afford it. This year, inflation is skyrocketing in Spain, but it is a problem that, to a greater or lesser extent, is affecting all of Europe.
In danger of extinction. Cheap and for everything. The electric car and European safety obligations are killing the cheap and versatile car. More if we take into account that the future Euro 7 standard will force vehicles to be electrified if the brands want to avoid paying harsh fines. And that every day more cities decree low emission zones.
That target client of SEAT, with a low budget and who needs a versatile car, is not being reciprocated by the brand. The ECO sticker is beginning to seem indispensable and sticking it to the windshield of a cheap Seat condemns you to go through CNG, a fuel that is no longer as attractive as it once was. Cheap electric cars with which to travel do not exist and the first to punch the table have been Chinese brands. And, despite everything, it is essential to spend more than 20,000 euros, far from the attractive little more than 10,000 euros of a Seat Ibiza of yesteryear.
And the marks flee. Since Coach They pointed out that one possibility is to position SEAT below Skoda, as a low-cost firm, but that this had not been a strategy that would have given the company benefits in past attempts. Being the Dacia or the Citroën of the Volkswagen Group could be a way out.
The problem is that with the massive arrival of electrification, there are two paths: either try the low total cost, as it seems that Citroën will try, or flee from this market, being aware of its low potential sales volume. Making a small electric car is very expensive at the moment, the costs of raw materials suggest that this will continue for a few years and Dacia is already beginning to flee from this market and renew its brand image.
That SEAT reaches the expected turning point alive is a matter of the Volkswagen Group not letting it die of laziness on the road itself. At the moment, it already seems that the brand is being relegated to the background, it is targeting a client that is ceasing to exist and Cupra is giving good results.
