Seat wants its new Cupra high-performance business unit to help lift its weak sales in two of Europe's five largest markets: France and Italy.
"We want to leverage Cupra to grow in markets where Seat still has low visibility as a brand and where there are many people passionate about cars," Seat President Luca de Meo said.
De Meo said his first target is Italy, where Seat's market share is less than 1 percent, according to data from the country's transport ministry.
Another key market for Cupra will be France, where the brand's market share was 1.2 percent last year, up from 1.1 percent in 2016, according to French industry association CCFA.
By comparison, Seat's position is much stronger in its home market of Spain, where it improved its share to 7.6 percent in 2017 from 6.7 percent, according to Spain's carmakers association, ANFAC. In Germany, Seat increased its share to 3.1 percent last year from 2.9 percent in 2016, according to the German motor transport authority (KBA).
Cupra's better-performing, higher-priced, more technically advanced derivatives of Seat's core models will also be counted on to help raise the brand's profit margins, De Meo said at the Geneva auto show last week.
Among the upgraded features that De Meo listed were connectivity and driving assistance. One of de Meo's top goals is to make sure that Seat becomes sustainably profitable after returning the brand to the black following years of financial losses.
Cupra's first model, a 296-hp version of the Ateca compact SUV, was presented ahead the Geneva show. The Cupra Ibiza subcompact hatchback and Cupra Arona small crossover are likely to follow, although they are not yet confirmed for production.
Seat said in February that it is making Cupra a standalone brand as a way to help the Volkswagen Group-owned automaker achieve sustainable profitability.
Seat's goal is to double Cupra's sales within the next four to five years. In the longer term, Seat sales boss Wayne Griffiths wants Cupra to account for 10 percent of the automaker's global sales.
Previously, Seat reserved the Cupra name for sportier variants of its mainstream cars. Sales of Seat's 17 Cupra variants increased by 50 percent in the last three years to 10,000 in 2017, Seat said. With the change, Cupra is now a separate entity with its own logo. It will develop vehicles that are more powerful and more specialized than Seat's mainstream models and function more independently.
One advantage of that, said Griffiths, is that Cupra could be used to showcase special products that would not immediately fit the Seat brand could be woven into the lineup over time. Griffiths declined to provide an example of how this might work.
Cupra has been working years to build up its performance credentials. "Four years ago, the Leon Cupra was the first and only front-wheel-drive [car] to go around the Nuerburgring racetrack in less than 8 minutes," said Matthias Rabe, executive vice president for r&d. With that in mind, Cupra presented the e-Racer, an all-electric racecar based on the Leon Cup Racer, at the Geneva show.
The Cupra e-Racer delivers 300 kilowatts of continuous power and 500 kw at peak. That results in a maximum speed of 270 kph and accelerates from 0 to 100 kph in 3.2 seconds.
Rabe eventually wants to have the Cupra e-Racer compete against fuel-powered vehicles in the TCR series. Before that happens, Seat will need to improve the endurance of the car's battery, de Meo said. The current charge lasts 22 to 23 minutes, which is not enough to complete a TCR race.