Seat to take a seat as VW mulls axing Spanish brand

The Volkswagen Group is understood to be handing out significant cost cutting measures in a bid to remain competitive, and it may result in one of its brands being placed on the chopping block.

German business publication WirtschaftsWoche reports Seat, the Spanish subsidiary of the Volkswagen Group, is facing extinction, with its axing being named in an internal document as one of the ways for the German carmaker to reduce costs.

“The Seat brand will be phased out in an orderly and cost-efficient manner by the end of 2029 at the latest, while ensuring continued support for existing customers (e.g., service) and the fulfillment of existing obligations,” the document reads, as reported by WirtschaftsWoche.

Seat is one of a handful of Volkswagen Group brands which heavily relies on rebadging and redesigning core Volkswagen products, such as the Leon (Golf), Ibiza (Polo), and Arona (T-Cross).

It came under Volkswagen ownership in 1986, having been founded in 1950 as a joint venture between Spanish firms and Italian carmaker Fiat.

Since becoming a part of the Volkswagen family, Seat has enjoyed modest success, being positioned – like Skoda and Audi – as an alternative to the core Volkswagen brand, however things started to get more confusing in the late 2010s.

In 2018, Cupra – which previously stood as a trim level on hot Seat models, similar to Volkswagen’s GTI badge – became an off-shoot, standalone brand, offering sharper-looking and sportier vehicles than Seat, but based on the same badges.

For example the Seat Leon Cupra became the Cupra Leon, raising more questions about why Seat exists when a better version of it was out there. This was only exacerbated by Cupra then launching its own vehicles, such as the Formentor, Tavascan and Terramar.

In the past few years, Leon’s product lineup has been reduced while Cupra has received all the attention from the Volkswagen Group, while the latter also operates in more markets than the former.

Cupra launched in Australia in 2021 and is continuing to release more products locally, something which is likely to continue, as WirtschaftsWoche reports the brand will get a stay of execution, with Seat to be “economically optimized and migrated to the Cupra brand”, according to the document.

"Cupra will continue as an independent brand with a target volume of 500,000–600,000 units per year."

While specific figures aren’t available, Seat and Cupra reportedly combined for 586,300 sales last year, however this was driven by Cupra rising by 33 per cent and Seat falling by 17 per cent on the year prior.

A decision on Seat’s future is expected to be formally announced soon.