Seat posts first profit for eight years

Will the turnaround be enough to secure the VW-owned brand’s future?

Seat, the Spanish car maker long since owned by the Volkswagen Group, has posted its first yearly profit since 2008. The company, with its headquarters at the Martorell plant just outside Barcelona, had once been touted by VW bosses as a potential 'Spanish Alfa Romeo' but instead stuck to selling affordable, mildly sporty, hatchbacks and MPVs. It became the problem child of the VW empire in 2008 though, as the crashing Spanish economy took significant Seat sales volume down with it, and a lack of global markets meant Seat was badly exposed to a stagnating European car market.

Now though, the black ink bottles have been opened again in Martorell, and Seat is reporting a 2015 after-tax profit of €6 million, compared to a €66 million loss in 2014. The company says that a significant growth in both sales and per-unit profit (up to 3.5 per cent on average) has been the driving force behind this recovery, and it posted a record turnover of €8.3 billion. The fact that Seat’s home factory was also judged of high enough quality to build Audis (it has built the Q3 and will switch to A1 production this year) hasn’t hurt either, and has kept the lines running when Seat sales flagged.

Progress twofold

"Seat's progress in 2015 was twofold - not only did we obtain a positive result for the first time since 2008, but we achieved it during a year of major challenges. We are implementing the right strategy that enables us to face the challenge of sustaining long-term profitability with optimism. We have a brilliant future ahead of us thanks to the launch of new products and the integration of new technologies in both the field of mobility as well as connectivity", pointed out Luca de Meo, President of the Seat Executive Committee, during the presentation of the 2015 annual results.

De Meo is no pushover - a former Fiat Group mover and shaker, and previously holder of a senior Audi position, his appointment in the whirlwind of post-diesel-gate recrimination was seen as a make or break proposition for Seat. With VW Group funds being squeezed as the lawyers and regulators close in, a loss-making Spanish subsidiary would be an unwelcome drag on resources. Thankfully for Seat and its workers, it seems that 'make' has been the answer, and not break.

Growth in hatchbacks

The Leon and Ibiza hatchbacks both saw significant growth across Europe, with sales up by 4.4 per cent and 2.4 per cent respectively, but it was the big seven-seat Alhambra MPV that saw the biggest gain - its sales climbed by 17.2 per cent, even though its overall volumes are behind those of the Leon and Ibiza.

Here in Ireland, the Alhambra performed also performed well, posting nine per cent gain in sales compared to 2014 while the Leon and Ibiza were up by 12 per cent and 9.2 per cent respectively. Overall, Seat sales increased in Ireland by 4.04 per cent in 2015, and have kept to a similar figure so far in 2016 - positive but well behind the overall gains for the rest of the market. Seat will be hoping that both Irish and European buyers will be wooed by its new Ateca SUV, due to go on sale in the summer. “This is excellent news for both the brand and our main factory because it is the fastest growing segment and symbolises a major step forward in making it the third pillar of the company, alongside the Ibiza and Leon families”, stressed de Meo.