Seat returned to profit with 68 million euros in 2022, leaving behind the losses of 256 million euros from the previous year. This was thanks to the exponential growth one of its brands, Cupra, is experiencing. The turnover of the Volkswagen group's subsidiary also surpassed that of 2021, with 10,513 million euros, the second highest figure the company has registered in its more than 70 years of history, only below the 2019 record, when it was 11,157 million euros. All of this, selling almost 480,000 vehicles, a similar quantity compared to 2021 and below that of before the pandemic, taking advantage of the higher margins of Cupra cars compared to Seat's. These improved results were accompanied by a cost reduction plan, which includes early retirements and incentivized voluntary departures, with the voluntary exit of 1,330 workers until 2026.
"The business structure is more robust today and we are building an even more solid financial structure over time. Although our volume of cars sold in 2022 was 4% lower than in 2021 due to the shortage of semiconductors, our turnover grew by 14% and revenue per vehicle increased by 18%," said Seat's Vice-president of Finance, David Powels, at the presentation of the 2022 results. "The company's change in trend has been achieved thanks to the increase in the proportion of Cupra models sold, an aggressive revenue management strategy, reduction of general costs, and improvements in efficiency," Powels stated.
With the easing of the semiconductor crisis, this year has already started better than in 2022, with 71,500 cars delivered in the first two months of the year, 27% more than in the same period a year ago. Given the end of the shortage, it is expected that this will benefit the production of Seat cars, which has been harmed compared to Cupra's with the distribution of components made by the German consortium.
Cupra's pull is expected to continue in 2023. If last year Seat's premium brand represented almost 40% of revenues, with 152,900 vehicles sold, it is expected to be more than 50% this year, with the consolidation of its presence in Europe. All of this will serve to prepare the ground for 2024, when the biggest product offensive will be launched, with the Tavascan and the Terramar. A year later will come the Urban Rebel, which will be manufactured in Martorell. The goal is to reach 500,000 units sold per year in the medium term.
Given the higher margins and the rapid growth it is registering, the Volkswagen group subsidiary has chosen to prioritize Cupra in the transition towards the electric car. "The future is electric and for our company it means that the future is Cupra," reiterated its CEO, Wayne Griffiths. For now, the electric car models that have been assigned to the Martorell plant are the Urban Rebel (which could be marketed under the brand Cupra Raval) and, recently confirmed, Volkswagen's ID.2all, both small in size. Manufacturing is expected to begin from 2025, with an investment of 3,000 million to adapt the infrastructure.
In this scenario, the historical Spanish brand Seat does not have its survival assured. If no electric vehicle production is assigned to it, its cars will survive as long as combustion engines are maintained. "We cannot electrify two brands at once," Griffiths defended, "Seat and Cupra complement each other in this transition phase." A possible future solution for Seat that the executive has put on the table has been its specialization in micromobility, a division that now operates through the subsidiary Seat Mo. In fact, it already collaborates with the Catalan company Silence, specialized in the production of electric motorcycles and small electric cars.
The assignment of a second electric vehicle platform for Martorell also remains to be cleared, to manufacture larger models than those planned, although Griffiths does not foresee it being imminent. "Currently, we do not have the capacity," he stressed, taking into account that the manufacturing of the new electric urban cars from 2025 will be combined with that of the Formentor and Leon models, awaiting to know if the Arona can continue. Greater production is necessary to ensure employment at the Barcelona plant, taking into account that the electric car needs less labor compared to the combustion car. The construction of a battery assembly plant in the surroundings of Martorell is also sought to cushion the decline in employment.
New circular economy hub
Framed within the reduction of its carbon footprint, Seat plans to open a circular economy hub in Barcelona. Still without the investment figures it will require or the jobs it will generate, the company has indicated that it will serve to develop industrial projects for reuse, remanufacturing and recycling, opening a new path for professionals from Martorell.