Seat Holding Back VW AG from Record Profitability

Volkswagen GroupVolkswagenGermany, 1938 > present98 models
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has been the exception in the European auto industry. While most of the other European automakers have suffered losses in the region. Volkswagen has bucked the trend and remained profitable even in Europe. However, there is one major exception within its stable of brands that is struggling to be profitable. SeatSeatSpain, 1950 > present29 models
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has had €1 billion in losses since 2008 and has only been profitable once in the last 10 years. However, Volkswagen is not so quick get rid of Seat, even if rivals think that it should. 

Seat was the only Volkswagen brand to lose money in the last earnings report. The downturn is blamed on the weakening of the Spanish market and that Seat and Skoda are competing nearly directly against each other. 

"We mustn't think that we've made the grade or that VW is now rich and invincible. Instead, we need a clear look at strengths and risks. Then, we're able to fix the weak spots," said VW personnel chief Horst Neumann.

Volkswagen bought Seat in 1986 and immediately reduced the company's workforce to keep it competitive. By 1994, it has 15,000 employees, and today it has 14,000 workers turning out 345,000 cars a year. Seat's Martorell factory is also used to produce Audi Q3sAudi Q3Germany, 2011 > present66 versions
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. 

To rejuvenate Seat, VW is planning a new IbizaSeat Ibiza Gen.4Spain, 2008 > present316 versions
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and LeonSeat Seat Leon Gen.3Spain, 2012 > present146 versions
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. Seat is also broadening to China and Russia. It will open 15 showrooms in China over the next year. 

Source: Automotive News Europe