Racking up over 1.4 billion euros in losses over the past eight years, Seat is to Volkswagen Group what Opel is to General Motors. Both brands are dependent on a weak European market, absent from overseas growth markets and suffer from weak brand images. Compromises made to boost sales such as the Exeo -- an old Audi A4 reborn as a Seat -- only muddied the Spanish automaker’s positioning. The sedan flopped with production ending in 2013 after just five years. To turn around the company, Seat President Juergen Stackmann has undertaken cost cuts ranging from the mundane -- more economical printers -- to the symbolic -- flying low-cost airlines on business. The cuts combined with rising sales helped Seat to fully finance its investments from its own cash flow last year for the first time since 2007. The automaker, however, appears on track to lose money again this year. Automotive News Europe Correspondent Christiaan Hetzner spoke with Stackmann about what Seat needs to do to turn a consistent profit.
How many more years of losses at Seat will VW Group tolerate?
I waste no time thinking about this. I focus on the future and both [VW Group CEO] Martin Winterkorn and [VW Group Chief Financial Officer] Hans Dieter Poetsch fully support our strategy. We are the youngest brand in Europe, and we have the youngest customers. What we need to do over the next five years is to move from the young to the young in spirit. But bringing older customers to the brand is much easier than trying to do the opposite.