Wayne Griffiths, CEO of Seat and Cupra, reiterated his opposition to tariffs on Chinese electric cars yesterday. "Because if someone is more competitive than you, the solution is not to hinder or obstruct them, but to try to match them," he said. And because the impact could go far beyond slowing down sales of the Tavascan SUV. This model is manufactured in China and has to pay an extra 20.7% tariff that the company is currently absorbing as losses.
The executive quickly drew a correlation: this situation jeopardizes the project of that car, which in turn threatens Cupra, something that endangers Seat SA itself, he said in a meeting with journalists after the manufacturer's 2024 results presentation. In fact, he placed it in that context: "In just two months of implementation, it caused us to lose six tenths in our operating margin, which stood at 4.4% compared to the 5% we had set as a target. Over a full year, that amounts to hundreds of millions that are incompatible with the pace of investments, over 1,000 million per year, that we have carried out in the last five years."
According to Griffiths, they have been negotiating a reduction in tariffs for some time, just like Tesla did, which pays less than an additional 9%. They have the support of both the Spanish and German governments for this. "We expected to have a solution this quarter, and if we don't achieve it, we will have to activate other scenarios." One of them would be to reduce the production and sales of the Tavascan, which would also force cuts in the volumes of models like the Seat Ibiza and Arona, much less profitable, with their consequent impact on employment.
The British executive said the ideal scenario would be for the solution being sought in European legislation to have retroactive effects. "With all the controversy it has stirred within the EU itself, I believe that it also wants a positive outcome."
Last year, Seat SA achieved record operating profits of 633 million euros, while profitability remained stable at 4.4%, considering a turnover of 14,530 million euros (+1.4%). Meanwhile, sales reached 558,100 vehicles (+7.5). The bulk of these results were due to the impact of Cupra, which has increased the average amount per car sold by 35% since 2029 and already accounted for more than half of the company's total revenue.
To avoid damaging the balance sheets, Griffiths acknowledged that they had waived (like Skoda) participation in the Volkswagen ID.1 project, the electric car priced at less than 20,000 euros that will ultimately be produced in Palmela (Portugal), although the Martorell plant and two German plants also bid for the project. The decision seems to be more of a 'political' nature so that the parent brand can capitalize on the success of this car and gain the electric prominence it has not achieved so far.
Reinventing the Barcelona Motor Show
"I left Anfac to focus on consolidating profitability and the company's projects, so I don't regret it. That's why we're not joining the ID.1. Furthermore, it's not the right time for a Seat electric car, with the market share of this type of cars being only 5%. It would have to reach 30% or 40% and also be profitable." In this regard, he also pointed out that they will not decide until 2030 whether to continue manufacturing combustion engine vehicles or not.
The CEO also explained that they will participate in Automobile Barcelona, which will take place starting on May 10, the same day that marks Seat's 75th anniversary. However, he explained that their participation, something that the Generalitat requested after his initial rejection, was made with the condition that this show "be reinvented" in the style of the IAA in Munich, much more interactive with the city and appealing to young people. If it sticks to the classic format and does not undergo a complete renewal, "it will die, if it's not already dying," he said.