Volkswagen considers phasing out Seat brand after 2030

(AWP Alliance News) - Volkswagen AG on Tuesday said it could gradually phase out the Seat brand after 2030 as tougher regulation and the cost of electrification make further investment increasingly challenging.

The Wolfsburg, Germany-based carmaker said no final decision has been taken, and several scenarios remain under consideration, depending on regulation, customer demand and market conditions.

Seat is a Spanish car manufacturer based in Martorell, near Barcelona, and has been a wholly owned subsidiary of Volkswagen Group since it was acquired in 1986. The company sells vehicles under the Seat and Cupra brands.

Seat will continue with its existing product roadmap, including the planned launch of mild-hybrid versions of the Ibiza and Arona in 2027.

However, Volkswagen said the economics of electrification and the investment needed to develop a new generation of Seat models are making the case for further investment in the brand "increasingly challenging".

"As things stand today, increasingly demanding regulation, the economics of electrification and the investment required to develop a new generation of models make the business case for further investment in the Seat brand increasingly challenging," it said.

Volkswagen stressed that the potential phase-out of the Seat brand would not mean the end of Seat SA, which owns both Seat and Cupra, its high-performance spin-off brand offering electric and hybrid models.

Cupra will instead remain the company's main growth driver, targeting a 3% market share across Europe alongside further international expansion.

The brand plans to enter the Middle East in the third quarter of 2027 and continues to assess opportunities in other markets, including a longer-term ambition to enter the US.

Since its launch as a standalone brand in 2018, Cupra has delivered more than one million vehicles and launched eight models.

The company expects employment to increase as its industrial responsibilities within the Volkswagen group expand and is seeking to secure an additional production platform for Martorell.

Volkswagen said the industrial transformation builds on the commitment made in 2022, when the Volkswagen Group and Seat SA, together with the Future: Fast Forward partners, announced an investment of EUR10 billion to accelerate the electrification of Spain.

Volkswagen Chief Executive Oliver Blume said: "We are committed to building on these strengths and creating the conditions for Seat SA and Cupra to continue growing and contributing to the success of the group."

"At the same time, we need to remain flexible and adapt our brand and product strategies to regulation, market conditions and what our customers demand," he added.

The news comes days after Volkswagen's supervisory board unanimously approved its 'Future Plan 2030', a sweeping restructuring programme aimed at improving the competitiveness of Europe's largest carmaker.

Volkswagen said on Thursday that management and unions had agreed to cut a further 50,000 jobs by the end of the decade, taking planned reductions to around 100,000.

The restructuring targets a 9% operating margin by 2030, equivalent to around EUR31 billion of operating profit, while Volkswagen plans to halve its model portfolio and reduce manufacturing complexity by around 75%.

The company is also targeting EUR135 billion of capital expenditure and research & development spending between 2027 and 2031, EUR6 billion less annually than under its previous plan.

Separately on Monday, Volkswagen said it had agreed key terms to sell its Osnabruck plant to Aurelius Capital Management LP and the state of Lower Saxony, with plans to transform the site into a centre for security and defence production.

Aurelius and Lower Saxony intend to gradually develop the factory into a competence centre for security and defence solutions.

Shares in Volkswagen rose 2.9% to EUR83.40 in Frankfurt on Tuesday afternoon.

By Eva Castanedo, Alliance News senior economics reporter

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