Seat has just presented historic results for the first nine months of the year with an operating profit of 501 million euros, which contrasts with the losses of the same period last year. His CEO, Wayne Griffiths, is very satisfied with the profitability obtained and highlights the return of the Seat brand to the path of growth. However, the big push comes from Cupra.
Do you think this positive trend will be consolidated in the coming months?
Until September we have had a 30% increase in sales and I think we are going to continue in this vein. Cupra is driving them with an advance of 55%, but the good news is that Seat is growing again, more than 20%. And billing has increased even more than sales, 39%, to almost 11,000 million. And we have reached a profitability margin of 4.6%, higher than that of many other brands. Cupra’s evolution continues to be spectacular: it has contributed 60% of the growth.
Is the Cupra brand going to surpass Seat’s turnover this year?
No, but it will be very similar, with a smaller sales volume in units. The average price of Cupra is higher and consequently so is the profitability and margin.
Do you fear a short-term negative impact from inflation, higher interest rates or rising car prices?
I am also optimistic about next year, because finally, we have semiconductors, good demand and good supply. It is true that we are facing the perfect storm, with inflation, the risk in very large markets like Germany, again the rise in energy prices, the crisis or the war between Israel and Palestine, while the war in Ukraine continues. The environment is complicated and it is difficult, but I do not worry because we have been experiencing crises around the world for decades. What you have to do is see opportunities in crises. And our great opportunity, next year, is to push Seat again, because we can finally manufacture, we have the semiconductors. This will help us maintain Cupra’s growth and recover Seat’s sales. We have achieved a margin of 4.6%, but that is not the end of the road.
What margin target do you have?
We want to reach 5% and in the long term the objective that the president of the group, Oliver Blume, has set, is 10%. To achieve that 10% we will have to do many more things, but we are working on it. I am an optimistic person, but also realistic. I have been talking to our large dealers in Germany, and even though their economy is suffering, they are very optimistic about the sales forecast for our brands.
Do the good results bring the possibility of a second electric platform in Martorell closer, in addition to that of the small Raval vehicle?
At the moment, we are going to manufacture the small BEV (electric) for Cupra and for Volkswagen. but I’m struggling to get a second electric car. Matías Carnero (member of the VW supervisory board) is also insisting a lot.
And Seat won’t have an electric car?
It could be, but not now. If we want another platform in Martorell it has to be a profitable platform that provides employment, and the higher segments give us more profitability. With the Cupra Formentor we earn four times more than with an Arona. But the Seat brand still has a lot of future, next year the Ibiza and the Arona will be updated, an attempt will be made to prolong the life of the Ateca and the León cycle is still new. To have a second platform in Martorell, we first have to demonstrate that our Future Fast Forward plan goes well, with 10,000 million investment in Valencia, Martorell and Pamplona. If we are able to demonstrate that we are productive, that the cars are competitive and that the quality is good, I believe we can fight to have another platform.
So far the Cupra models have been very well received. But what if they fail in the future? Will we have to resort to Seat’s volume?
There is no competition between Seat and Cupra. I want to maximize Seat because it is another market and I want to maximize Cupra at the same time. The situation is complex, because we do not know for sure when the electric vehicle market is going to start in Spain, which now only represents 5% and is not growing as it should. And from 2025 we will have almost half of the factory making electric cars.
When will electric cars be affordable for the general public?
Starting in 2025 we will launch the car for between 20,000 and 25,000 euros. For years the León has been the leader in Spain with this price. Finally, electromobility is going to be democratized, the effect will be seen especially in 2026. They are not the 60,000 or 70,000 euros that Teslas or Audis cost at the beginning. We now have the Cupra Born or the Volkswagen ID 3, around 40,000. The big leap that we are going to see is also going to come from the competition from Chinese brands.
The European Union has opened an investigation into competition from China. Are you in favor of imposing limitations?
No, the solution is not to put up protectionist barriers. There is competition from China but also from the United States. If more competition comes, you have to be more competitive. What Europe needs to do?is look at how the governments of China and the United States support their automobile industry. And that must be the answer. Europe must get its act together. I’m not talking about money, I’m talking, for example, about renewable energy policy at a competitive price. Because it makes no sense to make electric cars if the energy you use to produce them does not come from renewable sources. In Spain, renewables already represent 50% of energy and there is a great opportunity, but you have to have a plan like the Chinese or the Americans have.
And should that plan include purchase aid?
Of course, but more for the industry, not only for manufacturers but also for suppliers and the entire value chain. In Spain we employ two million people and this industry must be protected. It is important to be competitive, also with our labor laws and labor regulations, because decisions about where to invest and manufacture are a matter of competitiveness and profitability.
What do you think of the agreement between Sumar and the PSOE to reduce working hours?
We have to see if it is feasible, at what price and in what way. I respect the desire to have more free time, but it has to be within a certain common sense that does not have a negative impact on competitiveness.
What production will the Martorell factory have this year?
At about 450.00 units, 10% below what we would have liked. Not due to lack of demand or orders. But in the first half we suffered problems with semiconductors and then problems with supplies from Slovenia. But now we earn much more money than in 2019, when Seat manufactured, between Martorell and other European factories, the record of almost 600,000 cars.
