BARCELONA, Spain -- Seat is still a long way from achieving the 9 percent return on investment demanded by Volkswagen group management.
Seat President Andreas Schleef told sister publication Automobil-woche that it might take the Spanish carmaker "three to five years" to meet the targets set by VW group Chairman Bernd Pischetsrieder.
Last year Seat achieved a return on investment of about 2.5 percent.
Schleef is trying to revive the fortunes of VW group's problem child.
The German carmaker first bought a stake in Seat in June 1986 and took full control in 1990. By 1993, Seat losses had dragged VW deep into red ink and the parent company had to invest heavily in a restructuring program.
Former VW group Chairman Ferdinand Piëch once said that buying Seat nearly put VW out of business.
Last year Seat's revenue fell by 6 percent to E5.6 billion. Profit after tax dropped by 12.9 percent to E203 million.
Seat hopes to boost sales with the launch in the first half of 2004 of a new sporty compact minivan - which Seat is calling a "multi-sports vehicle." Schleef said he plans to substantially increase flexibility at Seat's Martorell plant near Barcelona where the sporty compact minivan will be made, provided that trade unions agree to introduce a new working-hours structure.
Despite the difficult economic conditions, sales boss Lars-Henner Santelmann said he wants to at least match Seat's western European sales of 375,850 units last year.
Seat sales in western Europe were up 4.8 percent in the first quarter, to 98,182 units. In Germany, Seat boosted sales by 12 percent to 13,456 units. The overall market dropped 2.4 percent in the opening three months.
Engineering boss Winfried Burgert said Seat is benefiting from its integration into VW's Audi brand group and is gaining more expertise in electronics and suspension engineering. Seat is currently developing the five-door version of the A3 for Audi. It won the contract in a contest against external manufacturers.