FRANKFURT -- Europe's largest carmaker Volkswagen will relocate all Seat Ibiza production back in Spain starting in June 2005, it said on Tuesday.
"The reason for the renewed bundling at the Martorell plant is the positive production development at Seat, which was supported by the current Spanish wage agreement," VW said in a statement.
The new wage agreement signed in May provides for more flexibility and productivity, it added.
VW decided to shift 10 percent of Ibiza production, or roughly 23,000 units, to Slovakia in 2002 due to an "insufficiently flexible wage system".
The Ibiza is Seat's most successful model, with more than 3 million cars produced since its introduction 20 years ago.