Currently reading: Seat's 'last chance' survival plan
Five-year restructuring plan must work, says CEO
1 min read
13 May 2010

Seat is to embark on a five-year restructuring plan - and company CEO James Muir has described it as "the last attempt for Seat as a brand".

"This is the last attempt for the brand. It wouldn't make sense to think anything else," Muir said, acknowledging his VW Group bosses are growing increasingly frustrated with the brand.

However, he acknowledged: "If one would want to get rid of Seat, one would have to give the other part money to take it."

Plans include better use of Seat's Martorell factory near Barcelona, which can produce 500,000 vehicles a year but currently runs at only 60 per cent capacity.

Muir stated that the plant must run at 90 per cent capacity to be profitable. Initiatives include production of Audi's small SUV, the Q3, in Spain from 2011. Around 80,000 units of that car are expected to be built per year.

Seat's previous three-year turnaround plan failed: sales fell 8.5 per cent to 336,683 cars in 2009.

Muir replaced Erich Schmitt last September.

The company's first quarter losses this year were lower year-on-year, at 110 million euros (£100m).

"I cannot solely rely on cost reduction to make Seat profitable. It'll be an uphill battle, but I believe it is possible," added Muir.

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13 May 2010

why dont they make cheap seats (the car !) and sell them in north africa, which is just across the gibraltar straits.

13 May 2010

Nice positive messages from Mr Muir!

That's going to help, having said that Seat's identity in the VAG group is difficult, a sort of sporty VW but undercut by Skoda and not as desirable as a Volkswagen.

The real answer seems to me to address a position where you need to run the factory at 90% to make a profit. That used to be the case many years ago with VW, but they got focussed on cutting costs and built the volumes. Seat needs to do both, extending the range to have a car in the Passat segment. The Leon points at the cars they should be building across the range.

13 May 2010

This shows that VW,like GM and Ford,could be juggling too many brands with no guarantee all will be profitable.VW,Skoda and Seat models are all the same so it was inevitable one would lose out.

13 May 2010

[quote crashbangwallop]The real answer seems to me to address a position where you need to run the factory at 90% to make a profit[/quote] Well there you go, we're all hoodwinked into thinking VAG executives are smart, and have something for everyone but they've outsmarted themselves. It reminds me of the BMC/BL meltdown? Too many brands? They've got a big parts bin to dip into, but how much is being thrown at marketing? On the surface I'd say "auto Emocion" and couple throwing away clothes and run for the beach (because they can't stand their Altea) must cost a fortune. I've only ever had one Seat a 2002 Vario, it was good value - but not really a good car. Recently at least they've made the WTCC and BTCC more interesting, but sadly there's no Tdi for Jason Potato this year. Oh, I just remembered the worst car I ever drove - The Seat Marbella. The best Seat I tried? The Toledo V5 pre-facelift, now that was nice.

13 May 2010

Currently I do not see where Seat's unique selling proposition is within VWG. Their cars are no better in any way than their sister products from Skoda or Volkswagen. The three brands overlap to such a degree that there is no room for a Seat niche in the family.

In order to survive, VWG needs to more clearly differentiate Seat from Skoda and the lower end of Volkswagen. Alternatively, they simply become a manufacturer of cars like the Exeo, and take all of Audi's obsolete models as a business plan. Low development costs, so keeps prices down. And there are plenty of worse things for Seat's brand image than being re-badged old Audis.

13 May 2010

SEAT have the strongest range for years and is a good product and good value. The thing is it is still a nich product and with the Leon 60% of all those sold are the FR TDi gives you an idea of who is attracted to the range.

SEAT have come a long way in the past 10 years and the often overlooked factor is SEAT's do have good residuals and do offer a sporty product. The strongest in the range has to be the Ibiza and Leon and the MKIII Leon is sure to be make or brake for SEAT. They do need to become the Sporty brand and leave Skoda as the "budget brand" how and if this can be done remains to be seen.

I have owned a MKI Leon Cupra which was again a good product and good value and lost 2K in it's first year (only 1K to me as got a 1K discount) been through various BM's, Audi and a Merc and have just come back to a MKII Leon FL FR TDi. I am impressed with the product and the performance for the price I paid. It is much better looking IMO to my previous 1 Series and the diesel engine is actually a tad smoother and quieter. I think SEAT will survive and have further products in the pipeline they just need to focus on what they want the brand to be seen as.

13 May 2010

Maybe the problem is the belief that these "secondary brands" must compete in every sector and sub sector of every market.

They fail find to find their unique niche in the bigger corporate portfolio as they never differentiate themself enough from their parent companies.

Seat was supposed to be the "fun" side of VAG. But how do you do that when selling Alhambra's alongside their Ibizas & Leons.

All it does is identify an Alhambra as a cheap mans VW or the Sharan as an expensive Seat.

How does an Altea XL or an Exeo fit the fun tag.

The cars individually are decent motors, but do not have an image that differentiates them from anything else.

A brand can only succeed if it does one thing well, so keep Seats , small, keep them young, and fun. Make the best use of VAG parts bin for the excellent quality dirty bits, and have the guts to be creative and progressive with the design and style.

13 May 2010

The problem is that for a sporting brand there is a lack of sporting product. They have a number of mpv vehicles that do not function either as real practical cars or sporting. Vw are about to make it worse by making a new sharan based mpv, not to mention the Ibiza station wagon. Muddled thinking, overkill of every segment even where they do not exsist, not to mention the vw stratergy to invade and dominate every sphere of motoring life (hmmmmmmmmmmmm). Vw cannot get grumpy because of seat, it's their mess, they made it. They did not allow the salsa into production and will not let seat upstage either vw, Audi, or now Porsche. Yet they will not let themselves look bad in all this. Bad brand management, bad product decisions, favouritisim of certain brands over others. I am afraid they have to take the blame.

13 May 2010

So Seat sell 336 thousand cars in 2009 and they are to have

a 'Last chance survival plan'

I wonder what would happen if VW owened Alfa who sold less

than 109 thousand in 2009,throw it in the bin or give it away?

Failure is a word VW will not put up with,Fiat however seem

to think that give it time and it will improve?

13 May 2010

It sounds like making cars in Spain isn't as cheap as it used to be. If they had too much capacity elsewhere - they'd reduce manning and increase productivity - which is what many UK plants have done very effectively. It's almost impossible to lay people off in Spain, which is why they are trying to fill that spare capacity. Nissan had the same problem with its Barcelona plan - Sunderland paid off 1200 people and remained competitive - Barcelona employees went on the rampage and eventually the company backed down - giving a plant which isn't profitable 'one more chance' to turn it around.


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