×

Why Spain's SEAT is booming in Germany

Car manufacturer SEAT might belong to Germany's VW Group but the company's chief executive told CNBC that it has retained its own identity and sense of innovation that has enabled it to return to profit in the region.

SEAT has a long history of car manufacturing in Spain, having been founded by the Spanish government in 1950. After a long partnership with Italy's FIAT, it was bought by Germany's VW Group in 1990. After struggling during Europe's recent financial crisis, SEAT returned to profit last year for the first time since 2008.

The company's Chief Executive Luca de Meo told CNBC that the company's owner had allowed it to keep and develop its own identity.

"It has always been the strategy of the VW group to respect the cultural identity of each one of the brands we work with. Every brand has its own strategy, own product and branding," De Meo told CNBC on Wednesday.


The SEAT Ibiza
Bloomberg | Getty Images
The SEAT Ibiza

"The history of success of SEAT in Germany started a few years ago. Germany is actually our biggest market and not a lot of people know this. The reason for that is that we are offering a level of quality and technology that the German buyers are appreciating."

Last week, SEAT told CNBC that sales were growing throughout most of Europe's main markets. Sales in Germany rose 3.8 percent in 2015, marking the fifth consecutive year of growth for SEAT in the country.

"In the last three years, sales have accumulated 25 percent growth, almost 80,000 vehicles more than in 2012," the company told CNBC last week. In 2015, sales exceeded the 400,000 vehicle barrier, a result which it said was due to a recovery in Spain and Italy and its best-ever sales figures in Switzerland, Denmark and the Czech Republic.

De Meo said SEAT's introduction of new products and a recovery in the wider European economy had helped the brand to return to growth. He added that the turnaround was "just the beginning" and that SEAT planned to launch four new models over the next two years.

The VW Group has been through a turbulent time in recent months. Last September, it admitted to using illegal software to manipulate emissions tests on diesel vehicles in the U.S. It is believed that 11 million vehicles are affected by the scandal worldwide. SEAT said around 700,000 of its diesel models were fitted with the software that the company has set about trying to find and refit.

De Meo said the VW Group had moved quickly to repair the damage caused by the scandal.

"Of course, this is not a nice thing to happen to the group but from the very first moment, our focus was on trying to find a solution for customers. So we started to fix the cars a couple of weeks ago…The process is working well and that the customer will have no impact is the main target for us."

Follow CNBC International on Twitter and Facebook.