Will VW say adiós to Seat?

How much has changed at Seat in the last 60 years? Not a great deal it appears since its humble beginnings. A tie-up between the Spanish government and Fiat saw Spain’s first car manufacturer take off. By re-badging the Fiat 600 and later the Panda, Seat struck a chord with cheap and affordable motoring and by 1967 Fiat increased its shareholding from 6% to 36%.

Production hit an all-time high with 282,000 cars rolling out of its Barcelona plant whilst the 70’s saw Seat branch out with the launch of Lancia’s Beta Coupe and HPE a-la Seat.

However, by the early 80’s Seat needed more investment but it seemed Fiat wasn’t prepared to budge and talks to try and seek the capital needed to keep it afloat began. Fiat eventually withdrew and without its Italian backer Seat desperately tried to forge on. They even went to the lengths of launching a re-styled Fiat Ritmo (the Seat Ronda) which sparked a lawsuit from the Italians. However, help was at hand from the mighty Volkswagen.

After a major licensing agreement was signed between the two brands, Seat re-started production with its own twist on the VW Passat, Polo and Santana. Whilst the rest of the world thought the Germans had really lost the plot getting Porsche to tweak the Ibiza hatch, VW increased its shareholdings to 51% in 1986 and kept investing.

With its substantial growth and heavy involvement in motorsport, Seat has been an incredibly successful all-round car manufacturer. Its growth has been phenomenal considering its always borrowed platforms and parts from its parent companies. However, with VW’s extensive growth programme in full swing they now have their eye on Alfa Romeo. Seat’s small chunk of European domination hasn’t been enough and its and its dubious label of “VW’s most unprofitable unit” and somewhat rapid decline in sales has put the Spanish brand under threat.

So where has it all gone wrong? Industry experts and customers alike seem to point the finger at Seat’s dull styling. Whilst the last generation of models were strong sellers, the Leon replacement put a curse on the brand and customers started to switch to more modern alternatives with up to date styling. The frumpy Leon looked bland and was as plain as an A4 piece of paper against its rivals. The firms ‘Auto Emocion’ advertising slogan hasn’t got hearts racing and despite new design director, Luc Donckerwolke (the man who styled the Lamborghini Gallardo), stepping in to pen the current Ibiza, sales have continued to decline and VW are starting to re-evaluate the situation.

Whilst Skoda has morphed into VW’s ‘value’ brand, Seat has always been the firms ‘sporty’ side but Alfa Romeo on the other has huge potential especially as its boss, Sergio Marchionne, wants to triple sales by 2014. If the Fiat-Chrysler alliance starts to crack, VW could be there to pick up the pieces. In fact, Volkswagen last month revealed it has 17.5bn Euros to spend which analysts believe will see the total buyout of MAN trucks, complete the merger of Porsche and fund VW’s eighth car brand as VW fulfil its stated aim of overtaking Toyota to become the world’s biggest car manufacturer by 2018.

Seat has felt the bad vibes within the VW camp as the German giant has given the go-ahead for its design department to map out an alternative Alfa Romeo range. Could VW’s ‘sporty’ brand become Alfa? Quite possibly.

VW says it could steer Alfa back to its sporty roots and a VW official has already admitted that it would replace Alfa with Seat calling the Spanish car maker “a brand which doesn’t know what it wants to be”. This “senior VW official” continued to fuel the rumours by claiming that the “demise of Seat would go almost unnoticed and the arrival of Alfa would have a big impact on the community and on our group”.

It’s not the first time VW and Fiat have come close to striking a deal. Back in 2004, Maserati and Volkswagen worked closely on a new 4X4 named ‘Kubang’ for the US market. If the project had gone ahead, sources claim that a VW-Alfa link would definitely have been pursued.
As for Seat, design director, Luc Donckerwolke, is working flat out on the Leon replacement as well as launching Seat’s own designed Exeo rather than the current re-badged Audi A4.

Despite millions of Euros still being invested into Seat’s research and development, a big question mark still hangs over the brand. This is the most uncertain time for Seat even if the Alfa Romeo deal is some way off. Killing it off has been bandied around for some time and although VW are serious, Seat has been granted a little more grace.

At least for now.