Mediaboss Marketing

Volkswagen AG, Europes largest automaker, will add a compact sport-utility vehicle to the Seat divisions lineup in 2016 to win new customers and accelerate a turnaround at the German parents only unprofitable unit.

The new model marks Seats entry into a growing market segment that represents almost 1 million vehicles annually in Europe and has increased by more than 40 percent over the last five years, the Martorell, Spain-based division said today in a statement. The SUV will be designed and engineered in Spain.

Expanding sales across Europe and abroad is vital to restore the divisions earnings. Seat, which hasnt been profitable since 2007, narrowed its loss to 152 million euros ($210 million) in 2013 from 156 million euros a year earlier as deliveries rose 11 percent to 355,000 cars, driven by demand in Germany and the U.K.

Its part of Volkswagens business model to make as many vehicles as possible on one platform, said Frank Schwope, a Hanover, Germany-based analyst at NordLB. It seems natural that VW is adding a Seat model to give the brand the opportunity to sell more vehicles and to get profitable.

Volkswagen rose as much as 2 percent and was trading up 1.6 percent at 183.75 euros as of 1:09 p.m. in Frankfurt. The stock has gained 17 percent in the past 12 months, valuing the carmaker at 83.9 billion euros.

Seat, which hasnt been profitable since 2007, narrowed its loss to 152 million euros... Read More

Seat, which hasnt been profitable since 2007, narrowed its loss to 152 million euros ($210 million) in 2013 from 156 million euros a year earlier as deliveries rose 11 percent to 355,000 cars, driven by demand in Germany and the U.K. Close

Close

Seat, which hasnt been profitable since 2007, narrowed its loss to 152 million euros ($210 million) in 2013 from 156 million euros a year earlier as deliveries rose 11 percent to 355,000 cars, driven by demand in Germany and the U.K.

VW plans to build the SUV at a plant run by the German companys Skoda division in the Czech Republic, where labor costs are lower, a person familiar with the matter said. The most likely location is the factory where Skoda produces the Yeti SUV, said the person, who asked not to be identified because no final decision has been made. Officials at Wolfsburg-based VW declined to comment.

Read more:
VWs Seat to Sell Compact SUV by 2016 in Turnaround Bid