VW took hold of Seat in 1986 when Spain's economy was bustling, and it has since grown the brand's presence all across Europe. But despite relatively low product development costs - all Seats are closely related to existing or outgoing VW and Audi models - the brand lags, especially compared to the automaker's similar, fast-growing Skoda brand.
In part, Seat's suffering parallels that of Spain, which has teetered in the brink of insolvency for years. Over the last decade, Seat has posted an annual profit only once and Reuters reports that its losses have added up to around 1 billion since 2008.
Still, VW has long been committed to the brand. In the early 1990s, VW restructured Seat and trimmed its workforce by about a third, but the brand has never been consistently profitable.
VW is optimistic, however. Executives have stated that Seat should be profitable "next year," and although that's a phrase that has been repeated more than once, hopes are high for the new Seat Leon compact, which will debut in just over a month at the Paris Motor Show.
In addition, VW is expanding Seat's presence to the lucrative markets of China and Russia. The German automaker's overall success in dethroning Toyota depends heavily on the ability of its individual divisions to grown their own volume, so all eyes in Wolfsburg are on Spain these days.
