Seat needs years to hit VW's financial targets

Barcelona. Volkswagen's Spanish subsidiary Seat is still far from achieving the 9 percent return on investment demanded by Volkswagen group management.

Seat President Andreas Schleef told Automobilwoche that the brand might possibly manage to meet the targets set by group boss Bernd Pischetsrieder no earlier than "in three to five years."

Last year Seat only achieved a return on investment of approximately 2.5 percent.

Schleef is trying to rehabilitate the VW group's "problem child." Last year Seat's turnover fell by 6 percent to 5.6 billion euros. The profit after tax dropped by 12.9 percent to 203 million euros.

It's hoped that the launch of a "multi sport vehicle" in the first half of 2004 will boost the brand's sales. Schleef plans to substantially increase flexibility at the Seat Martorell plant near Barcelona where the sporty compact van will be made, provided that the trade unions agree to introduce a new working time model.

Seat sales boss Lars-Henner Santelmann is also under pressure. Despite the difficult economic conditions he intends to at least match last year's sales figures of 452,571 units. The first quarter went. While the Western European car market decreased by 2.4 percent in comparison to 2002, Seat managed to increase its sales by 4.8 percent. In Germany the Spanish manufacturer boosted sales by 12 percent to 13,456 units.

According to engineering boss Winfried Burgert, Seat is benefiting from its integration into the Audi brand regarding electronic and suspension engineering. Seat is currently developing the five-door version of the A3 for Audi. It had won the contract in a competition in which external manufacturers also had taken part.

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