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New hybrid and electric cars for CUPRA, but what about SEAT and Martorell?

This week has been moved on SEAT. The brand announced the implementation of a battery factory in Sagunto that will employ 3,000 people, published its results for 2021, at a loss despite having sold 10% more cars than 2020, and clarified what the new model electrified from CUPRA.

The results are not as expected, but the investment is maintained and there is a medium-term product plan. However, one has the feeling that everything happens through CUPRA, leaving SEAT aside.

Is the brand in any danger? Will it be relegated to the background? What about the Martorell factory?

In principle, despite what one might think, SEAT is not going to take a backseat to CUPRA. And it is still the brand of the Spanish manufacturer that sells the most. Of the 470,500 cars that SEAT SA (SEAT + CUPRA) sold in 2021, 391,200 were under the SEAT brand.

CUPRA Formentor

The manufacturer’s second brand, CUPRA, sold 79,300 cars. To make matters worse, almost 70% of CUPRA sales were made with the Formentor (54,600 cars), relegating the Ateca and the Leon to supporting roles.

Even so, the lack of electric cars at SEAT in the short and medium term may be surprising. Even the Born, which was going to be SEAT is finally a CUPRA. The sports brand even announced a new electrified model, which is not electric, and which in principle will not have an equivalent in SEAT.

CUPRA

And with the statements of Wayne Griffiths, CEO de SEATadd fuel to the fire: “Cupra is not the end of Seat. Cupra gives Seat a future and the future is electric. The future is CUPRA“. Logically one can ask, what happens then with SEAT.

CUPRA: sell better, not sell more

Cupra BORN

In this period of transition towards purely electric mobility, SEAT and CUPRA need each other. Electric and plug-in cars are still expensive, above 30,000 euros for a car that is not essentially urban.

And the CUPRA customer, a brand created recently, but with a name already known and successful in the important markets of the United Kingdom and Germany, is willing to pay significant sums of money for his car. It is not the case of SEAT.

SEAT Leon e-Hybrid

The sales figures for SEAT and CUPRA for electrified models make this very clear. CUPRA sold 32,513 units of electrified cars out of a total of more than 79,000 cars, essentially Formentor e-Hybridsince the CUPRA Born arrived on the market in September 2021 (3,300 units were sold).

For its part, SEAT, between the Mii Electric, the SEAT Leon e-Hybrid and the Tarraco e-Hybrid, did not reach 29,000 units of electrified cars out of a total of almost 400,000 cars, of which, by the way, almost half are SEAT Arona and SEAT Ibizathe cheapest in the range.

SEAT Martorell Factory

Thus, despite the fact that CUPRA’s sales do not reach 17% of the total sales volume of SEAT SA, its turnover in 2021 represented 25% of the company’s global turnover. With CUPRA it is not about selling more, but better. Hence, CUPRA takes most of the investment in terms of electrification and electric cars, like the future Tavascan and the future sedan-coupé.

Meanwhile, SEAT continues to make volume, contributing 75% of the turnover of the two brands and, in the end, participating in the financing of CUPRA and absorbing part of the development costs of the CUPRA hybrids by sharing platforms and mechanical elements. Because we must not forget that CUPRA is a commercial brand, not a manufacturer. The CUPRA continue to come out with a SEAT chassis number, not a CUPRA one.

The future of SEAT is linked to the success of CUPRA

Cupra tavascan

In the medium term, SEAT and Martorell have a future. However, it is inevitable to ask what the gap will be for SEAT and Martorell within the Volkswagen group. Volkswagen has always had a hard time finding a gap or positioning for SEAT in the market and in the group. Going through phases of affordable cars to wanting to turn it into a kind of Spanish Alfa Romeo, but without really giving it the means and the product, beyond the Ibiza and Leon Cupra. Come on, they were lurching.

The role of Spanish-style Alfa Romeo, a passionate brand that touches the premium spectrum of the market, ultimately falls to CUPRA. As for SEAT, since the previous generation of SEAT Leon and with the arrival of the Ateca and Tarraco, they seem to have hit the nail on the head: a generalist brand that offers the same product as Volkswagen or Audi at a much more affordable price. The problem is that that role is occupied by Skoda for more than a decade. And Skoda’s results are much higher than SEAT’s.

Assembly CUPRA Formentor

The Czech firm sold 878,200 cars in 2021, while in 2020 it sold more than one million cars. In 2021, it had a turnover of 17,700 million euros and generated just over 1,000 million euros of operating margin. Skoda sells twice as much as SEAT and generates substantial profits. Which explains why Skoda not only has several electrified models in its range, but also two SUV-type electric cars derived from the Volkswagen ID.4.

SEAT factory

The installation of a battery factory in Sagunto, to supply both Martorell and Ford (the US group will manufacture electric cars for Europe on the Volkswagen group’s MEB platform), and eventually Landaben, in Navarra, is good news for SEAT as a manufacturer and the employment it entails.

As a brand, its survival will depend on the arrival of the small urban electric car that it will manufacture, just as CUPRA is going to do in terms of sales.

In this sense, it must be recognized that the play of Luca de Meo, former CEO of SEAT and promoter of CUPRA, has been a teacher. Yes, CUPRA sells much less than SEAT and Skoda, but it generates more profit. And at a time when manufacturers believe that the market in the future will be much smaller than today (which is why everyone invests in mobility services), the manufacturer that will survive will be the one that generates the most revenue per car, not the that more manufactures or sells. Hence, also, the general tendency to create premium brands (CUPRA, DS) or to want to position themselves higher (Peugeot, Mazda, Honda), except for Renault, which bet with success for Dacia.

CUPRA future

We are in a period of transition in mobility and perhaps also in a period of transition between SEAT and CUPRA. So, yes, it may be that in 15 or 20 years, SEAT as a brand will no longer exist outside of Spain, but if CUPRA continues on its current path, thanks to it, the Martorell factory will continue to function. And although perhaps with a lower capacity, it will continue to be active. And that is what is really important.

In Motorpasión | We tested the SEAT Tarraco e-Hybrid FR, a 245 hp ZERO-labeled SUV that convinces as a family car and not so much for its efficiency | We tested the Skoda Enyaq iV: an electric car that stands out for its design with a quality that surpasses the Volkswagen ID.4

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I started to play with tech since middle school. Smart phones, laptops and gadgets are all about my life. Besides, I am also a big fan of Star War. May the force be with you!

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