Seat is ready to enter auto markets in North Africa, Latin America

Article by Christian A., on April 3, 2017

Spanish automobile manufacturer Seat is seeking to expand its market in both North Africa and Latin America in the next ten years, looking to steady its profit by decreasing its dependence on the Europe market.

Luca de Meo, head of the Volkswagen AG's seat division, announced in Barcelona that even though there has been a steady increase in sales such as in markets of Italy and France, it would be highly beneficial for Seat to be able to sell around 30 percent of the vehicles outside Europe in the next 50 to 10 years. Producing Seat automobiles in VW production departments in Mexico could ease access to Central and South American markets, de Meo exclaimed.

Seat, created around 1950 to assemble Fiat models and that was acquired and had become a subsidiary for Volkswagen in 1986, has been a chink in the armor for the German automobile manufacturer. VW has reiterated that it will reassess its company's portfolio in the wake of "dieselgate"- the emission scandal that rocked the car market scene.

Due to the aftermath of Dieselgate, it puts further stress on Seat- which sells more than 90 percent of its automobile in its home base in Spain- to enhance its performance in the future. Europe's bursting car market competition is bent to further heat up eventually due to Peugeot Société Anonyme Group (PSA) plans to amass General Motor Co's Opel to produce Europe's second largest automobile manufacturer. The Spanish company will proceed with its role in VW Group's new established factory in Algeria, according to Luca de Meo's speech at the Seat's annual press conference.

VW group of companies has merged with Algerian SOVAC in order to produce the Seat Ibiza, VW Gold and Caddy and also including the Skoda Octavia at the new factory in Algeria. The new Seat Ibiza's production will ensue at the new factory located in North Africa at the latter half of the year where the parts that will be used to build the Ibiza and supplied from the Seat's Matorell plant will be found.

After almost a decade of profit losses, Seat released an operating profit of around €153 million in the past year led by the recently released Ateca, the company's first ever SUV. With an operating margin of an estimated 1.7 percent revenue, it is still considered to be weakly profitable, considering the 6.7 percent for the company and 8.7 percent for the Czech automobile company Skoda.

Seat is on the move to roll out a larger SUV in the year 2018, in an act to hike up its performance. The Ateca's big brother, based on the VW Tiguan and made in Germany, will be the Spanish automaker's future flagship.

As Seat's main releases will remain economical hatchbacks such as the Leon and Ibiza, De Meo remarked that they are confident about the potential of the still unnamed Seat's new vehicle. The Ateca's next of kin will eventually become the Seat's 3rd sports utility vehicle and will have seating that accommodates 5 to 7 passengers.

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