Seat is at a turning point

18 years after it was sold to VW, the Spanish automobile manufacturer hopes for a revival

Barcelona. Seat president Andreas Schleef is confident that the brand will in future account for a larger percentage of Volkswagen Group's total results than in 2003.

Some 18 years after its takeover by VW Group and two years after its integration into the VW's Audi division -- Seat has now been repositioned as the group's "junior" premium brand.

In 2003 the Spanish VW subsidiary's sales were 5.5 billion euros (2002: 5.6 billion euros), but the profit after tax was only 134.5 million euros (203 million euros).

The result was once more far below VW Group's internal target figures.

Seat made an operating loss of 43.5 million euros last year due to currency rate fluctuations and the loss of VW Caddy production last June.

"The figures draw a picture that is still strongly influenced by the past -- but we have now crossed the bridge to the future," said Schleef.

Three pillars support this bridge, which Seat hopes will lead to higher profitability:

1. The new sporty Altea compact van.

2. New sales and logistics structures.

3. A new collective contract with workers, which Seat bosses hope, will mean more flexibility and higher productivity.

"It should be possible to keep the plant running 24 hours a day and 6 days a week in future," said Schleef.

He said that talks with the unions about the new contract are in the final stages, with an agreement in sight. The contract follows the VW model and includes group work, working hours accounts and the lowering of the average age of employees,

Scheef believes the new Altea will mark the turning point in Seat's history.

Seat invested a total of 582 million euros in the car, which will have a whole family of models. Seat hopes to sell at least 60,000 Alteas -- with ambitious prices, probably starting from 18,000 euros.

"We are now a premium brand -- the customers will understand that," said Schleef.

The former Audi manager would have preferred to start the renewal of Seat's model range with a roadster similar to the Tango concept car. The Tango project was scrapped in November due to high costs.

Schleef is still considering a Seat convertible, ideally with folding hardtop.

The Toledo will be face lifted at the beginning of 2005 but there will be no successors to the Cordoba and Arosa models.

There is still a question mark over the future of the Alhambra, which is built in Portugal with the VW Sharan and the Ford Galaxy.

"VW is so busy thinking about its new microbus that the Sharan succession has not been decided yet," said Schleef.

Seat sold 23,422 Alhambras in 2003. The automaker's best selling model last year was the Ibiza with sales of more than 216,000, followed by the Leon with sales of 95,700 units.

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