Cupra ready for any economic 'storm,' CEO says

MUNICH -- Cupra is well prepared to weather any economic downturn in Europe, Seat and Cupra CEO Wayne Griffiths said, thanks to strong demand and future models.

“There’s a storm on the way,” Griffiths said on the sidelines of the IAA auto show here. “The economic environment is going to get tough next year, with inflation and interest rates at the current levels and a recession threat in of the biggest European markets.”

Sales at Cupra, which became a standalone brand spun off from Seat in 2018, increased 57 percent to 107,300 in the first half of 2023 compared with the same period last year – including 23,000 sales in June alone. “You can do the math to see where it will be at year’s end,” Griffiths said.

He said that while Cupra was unlikely to overtake Seat’s sales volume this year, the brand, which sells higher-cost vehicles, is more profitable. Parent company Volkswagen Group has said that Seat will take on a new role in the future as a comprehensive mobility services provider.

In addition to a strong order book, Cupra is preparing to launch three key models in the next two years, starting with the full-electric Tavascan midsize SUV in about a year, with European models exported from China. It will be followed by the midsize Terramar SUV, a sibling model to the Audi A3 (the two models will be built in Audi’s factory in Gyor, Hungary). The Raval small full-electric hatchback will debut in late 2025.

Cupra is targeting 70,000 annual sales for the Tavascan alone.

Cupra showed the Dark Rebel concept – with design elements of a sports car and a shooting brake hybrid -- at the Munich auto show. “If we can dream it, we can make it,” Griffiths said about the prospect of a production version, noting that the Tavascan was presented as a concept at the 2019 Frankfurt auto show.

Griffiths sought to dispel doubts about the future of the Seat brand, which has received less investment from VW in recent years and has not announced future electric vehicles. VW brand CEO Thomas Schaefer was quoted in the press saying “Seat has no future making cars,” but Griffiths said he was misquoted.

Griffiths said Seat is about to refresh the Ibiza small hatchback and Arona small SUV, while the Leon compact hatchback still has a long time to run, he said. He said Seat sales are up in 2023 after suffering for several years because scarce semiconductors were rerouted to Cupra because the latter brand has higher profit margins.

Cupra is still working on a possible move to the U.S. market, Griffiths said at a news conference at the Munich show.  The debut, at an unspecified date, would need a product suited to the North American market such as a large SUV, he said. 

“Such SUVs are available within the Volkswagen group product portfolio,” he said. “We’re working on all the issues and we’re moving ahead in a positive direction, but we can’t confirm today that from a certain date we’ll go to the U.S.,” Griffiths said.

He said that in addition to a suitable product, Cupra would need sufficient investment to enter the U.S., which he said could be an “expensive experiment.”

Another key factor is production capacity in North America within the Volkswagen Group, Griffiths said. “You have to be there if you want to make money”, he said, because of the Inflation Reduction Act, which incentivizes U.S. EV production, and the need to hedge currencies.

Asked if a large SUV for U.S. buyers would run counter to Cupra’s sporty image, Griffiths said, “No, because I’ve seen the cars.”