BARCELONA - Seat will keep the Toledo in production in Spain even after a new car in that class is introduced.
The new car will get a new name and will be built in a Volkswagen plant in Belgium. The Toledo, which now sells about 50,000 units a year, will be kept at Martorell, Spain, as long as customers want it, said Seat President Pierre-Alain de Smedt.
He suggested that 20,000-30,000 was a reasonable volume for a car that was introduced in March 1991.
The new car has the code-name SJ. It is part of Seat's plan to reach 500,000 units a year by 1999, said Detlev Schmidt, vice-president for sales and marketing.
Seat expects to sell 400,000 cars in 1997.
The brand's fastest growing markets are in the north and east, where Seat's sales base was small. In the first four months of 1997, said de Smedt, Seat sold 10,000 units in eastern Europe, up 41 percent. Poland takes about 60 percent of the total.
Sales were up 19 percent in the UK in the same period. The UK is a special target, because it is Europe's second biggest market this year, but Seat's fifth biggest. 'We developed right-hand-drive cars for the UK,' said Schmidt. 'To sell 0.3 percent of the market is not enough.'
Achieving the first 1 percent of the market 'is not easy,' said Schmidt, but then volumes get big enough that advertising becomes more effective. Fixed costs remain the same whether you sell 10,000 or 30,000 cars a year, he said.
In eastern Europe, said de Smedt, Volkswagen Group is not worried that Seat and Skoda, the Czech brand, will take sales away from each other. 'There is space enough' for both, he said. Skodas will be designed and positioned as solid, robust cars like Volvos. Seats will be marketed as sporty and youthful.
De Smedt is pleased with Seat's position at the moment.
'We are in a very positive phase,' he said. 'We have a clear strategy.'
He said Seat has been hurt in the market by a reputation for poor quality that it no longer deserves, but now customers are starting to understand that Seat has Volkswagen quality. Also, he said, Seat's wins in rally motorsports have boosted the brand's reputation.
De Smedt counts on continued efficiency at the factory to give Seat 'the best relative price-performance ratio' in the business.
'We are not discounters,' he said. 'We have the best productivity within the Volkswagen Group,' allowing Seat to price competitively.
He said the plant in Martorell averaged 67 cars per worker in 1996, and would improve that figure by 10 percent this year.
'Labor is just one element,' he said. 'Seat is also doing well on purchasing.'
He said Seat is now contributing a profit to the VW Group, and 'we will grow more than VW and Audi.'
The VW Group counts on strong product differentiation to keep the brands from competing with one another.
'The differentiation in future products will be extremely clear,' he said. 'The interior is different, all the body parts are different.' Speaking of the new Golf and the Toledo successor, he said, 'When you see the cars, they are totally different.'
De Smedt indicated that before 2000 there will be one or two new Seats beyond the SJ replacement for the Toledo. 'We will have good surprises,' he said.
He said the Seat brand can extend its range upward beyond the lower-medium class where the Golf and Toledo compete.
Seat has 1,200 engineers in Martorell, working on interiors, body styling and other Seat-specific aspects of the platforms. Schmidt said Seat is typically responsible for 60-70 percent of the development of vehicles.
For new products, Seat invites design proposals from Italdesign, its inhouse designers in Martorell, and the VW-Audi-Seat design center in Stiges, near Barcelona. The Martorell team won the design for the Arosa and the Cordoba Vario introduced at the Barcelona auto show.