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Volkswagen Group continues its push to influence government policy, with Pedro Sánchez signaling support for a German consortium proposal that includes Seat and 62 other companies as candidates for new European funding under the New Generation PERTE. After the nomination was submitted a week earlier, Herbert Diess expressed appreciation for the government’s speed and even touched on plans to advance the Sagunto battery factory and other electric-vehicle initiatives.

Diess used social media to highlight the collaboration between the auto group and the Spanish administration. On LinkedIn he praised the government again and showed Seat some loyalty amid circulating rumors. The narrative points to a gradual evolution of the Seat brand toward a future where Cupra plays a central role. Cupra is positioned as a catalyst within the Volkswagen Group, focusing on profitable models and a strategy centered on compact electric vehicles for the Seat, Skoda, and Cupra brands.

In a message about Cupra, Diess stressed that Cupra will not replace Seat but will help enhance profitability. The future lineup for Seat remains clearly defined, with no new models announced beyond next year’s facelift of the Seat Leon. The Spanish production line faces a midterm shift as Seat Ibiza, Arona, and León approach the end of their cycles in 2029. The Tarraco will follow, and Ateca production outside Spain will be guided by the group’s segment strategies, while electrification is set to be a key driver of change. Cupra Formentor is expected to evolve, with installation and technology details still to be announced.

microchip crisis

For Diess, Cupra and profitability are realities. The current microchip shortage accelerates Seat’s transition, with a prioritization of Cupra production to secure higher margins across the lineup. Electrification strategies for Seat are aligned with this emphasis, as the brand’s distributors also benefit from the streamlined focus on high-margin models.

The head of the automotive group, ranking second worldwide in vehicle sales behind Toyota in 2021 with about 4.5 million units, has long emphasized Cupra’s role. In a 2020 Davos interview, he described Seat as a major reference within the Volkswagen Group and outlined a transformation plan that would bring Cupra into a closer partnership with Seat. The workforce at Martorell and its employees are identified as central to this strategy, with continued collaboration anticipated as Cupra integrates more deeply. The coming of age for Cupra appears linked to the pandemic and the ongoing shift to electrification.

Diess noted that the core Seat brand remains stronger than ever. More investment in Seat has been made in recent years, with models like Ibiza, Arona, Ateca, León, León Sportstourer, and Tarracco cited as solid pillars. A broader plan, described to the company’s leadership in Barcelona, highlighted Cupra and the battery factory as primary focal points, while Seat’s broader role received comparatively less emphasis in some public briefings.

Seat investment

Diess reaffirmed faith in Seat and especially Cupra and Wayne Griffiths. The program has seen substantial investment, surpassing eight billion euros, with ongoing expectations for continued model updates and profitability heading toward 2029. Griffiths is tasked with expanding Seat and Cupra sales to drive profitability as quickly as possible.

At the corporate level, the Martorell plant is cited as a hub for producing across brands, a move intended to bolster Seat’s profitability and preserve jobs. Current discussions touch on early retirement provisions and broader workforce considerations. Future production will center on small electric vehicles from Cupra, Skoda, and Volkswagen, with some small SUVs produced in Landaben for the same brands. Seat’s future activity remains a strategic question for the group.

Diess underscored an electric platform that positions Seat to lead the design and production of small BEVs for Skoda and Volkswagen. The objective is to make electric cars affordable for more people while coordinating Iberian Peninsula electrification efforts and contributing to Europe’s broader electrification push. Seat and Cupra are expected to remain central players in this trajectory.

Spain, industrial power

As the Spanish brand receives attention, the PERTE program is highlighted as a cornerstone of Spain’s industrial strategy. Spain is described as Volkswagen’s second electric-vehicle production center in Europe after Germany. Volkswagen Group plans a seven-billion-euro investment in Spain, with a total of ten billion euros tied to 62 Spanish PERTE participants. This represents the largest industrial investment the country has ever received. For Volkswagen and Seat SA this translates into a new battery gigafactory in Sagunt, plant electrification in Martorell and Pamplona powered by renewables, and a stated ambition to begin producing several small electric vehicles in Spain from 2025 for the brands Volkswagen, Cupra, and Skoda.