Seat boss bullish on brand's surge in Europe
Money-losing Spanish brand Seat will miss its target of making a profit in 2013, but positive signs are increasing for the Volkswagen Group subsidiary. Seat's global sales grew 11 percent to 324,500 cars during the first 11 months last year. Europe accounted for more than 80 percent of those sales. That number would worry most auto bosses given the region's six-year slump, but Seat President Juergen Stackmann sees great potential for growth in the region. Stackmann, who took over Seat in May 2013, explained why he's bullish during an interview with Automobilwoche Editor Guido Reinking and Reporter Pia Krix. Automobilwoche is a sister publication of Automotive News Europe.
Your predecessor, James Muir, said Seat would be profitable by 2013. That goal will be missed. How much time will you need?
We want to be profitable as soon as possible. That's our No. 1 goal. But we are not currently focusing on the precise point in time, but rather on our three building blocks: our product portfolio, sales and costs. We do 80 percent of our volume in Europe, and we are dependent on these sales results. We see positive signs that our core markets are recovering. Even our home market seems to have bottomed out. We are cautiously optimistic about the next few years.
Stackmann: ''We believe that we can grow there [in Europe], regardless of the market’s overall trend.''
But Europe is in crisis. Why don't you launch in fast-growing markets?
A brand like Seat can't do everything at once. We must tackle things in a focused way and bring them to a conclusion. And, unlike many other companies that see Europe as a problem, we actually see it as quite attractive. We believe that we can grow there – regardless of the market's overall trend.
Where do you see the most potential?
We have been very successful in Germany. We have a market share of nearly 3 percent. We have a 5 percent market share in Austria. We are at more than 2 percent in the UK. There are a number of markets where we are at about 1 percent, which is too small. That is why we are strongly focusing on Europe as our core marketing territory, instead of heading off into the distance.
How is your dealer network positioned? Are you looking for partners?
We have a presence in 81 countries and currently have about 1,800 sales partners. The challenges are very different in each market. In Germany, we are looking for more dealers. Our dealer network is much too thin in France, too. In Spain, we are in a consolidation phase.
TITLE: President, Seat
MAIN CHALLENGE: Maintaining Seat's sales surge despite its heavy reliance on sluggish Europe.
How is Seat doing in outside Europe?
We have a presence in North Africa and in the Mediterranean region, which is easy for us to reach geographically. We are strong in markets such as Turkey, Israel and Algeria. But the North African region is very unstable. It is hard to predict how the market will develop. Our market share is more than 2 percent in Mexico. Our next task there will be to establish our Leon and Toledo models and turn Mexico into a major market for Seat long-term.
Cost reduction is another one of your building blocks. What has been done?
We are looking at all cost components and are focusing our investments on products for the future. At the same time, we are trying to keep all the other cost categories under control. We are examining major categories such as energy consumption as well as smaller things such as who is flying on what airline. We have already announced that we want to reduce labor costs by 5 percent in the coming years.
In 2013 you were on track to make 400,000 vehicles at your main plant in Martorell, Spain, but your capacity is 500,000. Is that a problem?
The brand has grown by 30,000 units over the first 10 months. I can't yet say how many it will be for the entire year. We have a solid, stable system thanks in part to the production of the Audi Q3 at the Martorell plant.
When will you reach full capacity?
I can't predict that. But the already-announced goal of 500,000 units in 2018 is number that I can live with.
Your sister brand, Skoda, has an SUV. Isn't that also a must for Seat?
We are working on a product of this type. It is a strategic priority for us. It fits the brand and develops another European sub-segment. We have the concept, but we haven't made a decision yet.
You are the sixth Seat boss since 2000. Will you stay a while?
The past is of little concern to me. The job that I have taken on is based on a good foundation. I was happy to take the baton and I will continue to carry it. I have no Plan B. I am here to achieve my goals – and the job is fun.
You can reach Guido Reinking at email@example.com.