SEAT targets user-choosers for ongoing growth
SEAT is aiming for “double digit” growth in sales by optimising its product range and focusing on higher-value segments than previously, according to chairman of the executive board Luca De Meo. By Alex Grant.
Despite the Volkswagen Group’s turbulent 2015, and SEAT’s investment in developing and manufacturing new models at its Martorell plant, the brand recorded a €6m (£4.7m) profit after tax last year – its first profit since 2008, and a large turnaround compared to a €66m loss in 2014.
De Meo, appointed from Audi last November, says brand’s self-sufficiency and new autonomy under the Group restructure means it has the potential to define itself more clearly. “After a period of strong centralisation, the wish of [new VW Group CEO] Matthias Müller and the Board of Management is to give to the brands a little bit more independence in their decisions and to reinforce them as much as it makes sense,” he said.
“We have to do things that can make SEAT more unique because, to be completely blunt, the answer to the question “What is the purpose of SEAT?” in the Group and the market, hasn’t found a completely compelling answer yet. That’s exactly what we’re working on, and we’re convinced now we can 100% give the answer.”
New models will play a role, building on the success of the Leon and Ibiza. De Meo indicated that the brand would be looking to continue recent sales growth by focusing on low discount sectors at the core of the market, rather than trying to hit every niche.
“From a brand position point of view, when we do a car like Ateca we are moving a bit more in the centre of the room – we were in the corner. That very exaggerated sports, boy racer positioning put us in the corner – now we are trying to appear more relevant to a bigger audience,” he said.
“You will be seeing SEAT growing two digits [percentage] in the next two or three years. We had that already on the Leon and on the fact that Ibiza is surprisingly stable. With the Leon we grew 25% in three years so with new models maybe we can continue this.”
High volume, low discounts:
The Leon’s higher transaction price is a foundation for moving the brand upwards, but there’s no plan to stretch the range. The Leon-based Ateca SUV arrives this summer, and a smaller crossover is confirmed for a 2017 launch, which could put SEAT up against the Nissan Juke, Renault Captur and Vauxhall Mokka.
De Meo is targeting segments where SEAT can compete viably for volume, both on price and brand credibility. So while there’s an ongoing role for the Alhambra, the brand has exited segments such as the Altea’s, and it’s looking for customer progression to higher trim levels across the board.
De Meo doesn’t see technology companies such as Apple and Google as a threat to the automotive industry. Instead, he sees connected cars enhancing the customer experience. Working with Samsung, SEAT recently unveiled smartphone-based access for sharing cars, and for reserving and paying for parking spaces, and plans are ambitious: “For me it’s the move from the iPod to the iPhone,” De Meo said. “We are putting [our cars] in the middle of a digital ecosystem. On those fields, 130 years of history doesn’t count – we almost all start from scratch. I hope and dream about the possibility that I can work to be maybe one of the front-runners.”
Unsurprisingly, electrification is on SEAT’s radar, but it’s seen as being more for 2025 CO2 targets than 2020’s: “We will have to find the right mix of solutions to hit the target,” he explained. “Because it is based on the average consumption of the fleet, you have to go into volumes. To go into volume in the SEAT segments and market means doing something that’s really affordable.
“If you talk of fuel cells and carbon monocoque chassis, no SEAT customer will be able to afford it. I think we have to come up with solutions that are reasonable in terms of pricing which segment etcetera – that’s the challenge for us.”