VW's Seat brand mulls vehicle output in China
Volkswagen AG is weighing options to produce vehicles in China for its Spanish Seat brand as part of a broader effort to restore earnings at the company's only unprofitable unit.
Seat is examining opportunities for local assembly in China, Seat chief Juergen Stackmann said in an interview this week at the Geneva Motor Show. A time frame for a decision isn't set.
"It's clear that a purely export-driven strategy won't work" to establish a profitable business for Seat in China, Stackmann said. The division started selling imported cars in China two years ago, opening dealerships in Beijing, Shanghai and other major cities.
At the same time, "establishing local production in China would of course be a Herculean task for a brand like ours," Stackmann cautioned.
Expanding sales across Europe remains vital for Seat's turnaround efforts to improve use of its factory in Martorell outside Barcelona. Seat has narrowed annual losses since 2009, and its global sales rose 11 percent to 355,000 cars last year, driven by demand in Germany and the United Kingdom.
But sales have been abysmal in China, where Seat sold only 1,100 units in 2013.
Plans by his predecessor, James Muir, to expand to China failed because of high import duties and distribution problems, Stackmann said.
Stackmann, who succeeded Muir as head of Seat in May, is betting on demand for the revamped compact Leon vehicle line to improve sales further this year. Stackmann wants to establish the Leon as the brand's second pillar, in addition to the smaller Ibiza.
"It's clear that a purely export-driven strategy won't work" to establish a profitable business for Seat in China, Stackmann said. The division started selling imported cars in China two years ago, opening dealerships in Beijing, Shanghai and other major cities.
At the same time, "establishing local production in China would of course be a Herculean task for a brand like ours," Stackmann cautioned.
Expanding sales across Europe remains vital for Seat's turnaround efforts to improve use of its factory in Martorell outside Barcelona. Seat has narrowed annual losses since 2009, and its global sales rose 11 percent to 355,000 cars last year, driven by demand in Germany and the United Kingdom.
But sales have been abysmal in China, where Seat sold only 1,100 units in 2013.
Plans by his predecessor, James Muir, to expand to China failed because of high import duties and distribution problems, Stackmann said.
Stackmann, who succeeded Muir as head of Seat in May, is betting on demand for the revamped compact Leon vehicle line to improve sales further this year. Stackmann wants to establish the Leon as the brand's second pillar, in addition to the smaller Ibiza.
