Photo: SEAT
It's one thing to sell cars, quite another to do it profitably. SEAT is a geat example, as after about two decades of not putting money in the bank, the Spanish automaker has been reporting earning, relatively small ones in 2015.
But thanks to a combination of factors, in the first nine months of 2016, the brand achieved an operating profit of 137 million euros, a figure which is eleven times higher than the profit obtained last year (12 million).
The corporate statements would have us belive that it mainly has to do with increased sales. But that's not the case, as slowing demand actually forced the company to discontinue two Ibiza body styles alone. In fact, deliveries only grew by 1.5% in the period until September, reaching 319,900 compared to 309,400 units last year.
So, could 1,500 extra sales generate over a hundred million in profit? Of course not. In reality, SEAT's money stream likely has to do with two things, spending on options and building cars for Volkswagen Group. Let's not forget that SEAT's factories in Spain make popular Audi and Volkswagen models.
The large Alhambra MPV witnessed the most impressive growth, with demand jumping 23%. We've seen quite a few of these in showrooms, costing about $40,000 thanks to all the options and features that are shared with the VW Sharan. Very rarely do you see customers spending that much money on the Leon compact because it's not owned for that long and the equivalent Golf or Octavia makes a better family car.
SEAT President Luca de Meo underlined that “we are satisfied with the operating profit obtained in the first nine months of the year. The success of the Ateca can already be seen in these results and proves that our biggest product offensive in history will have a huge positive effect on strengthening the brand. The Leon, Ibiza and Arona will drive performance."
Core revenue was the highest it's ever been at 6.535 billion euros, up by 2.3% over the January to September period of last year. Certain markets, including Mexico, Poland, Austria and Turkey are starting to play an increasingly significant role in the automaker's business.
Of course, going forward, the Ateca will play its part. Even though it's only been available for a few months, over 30,000 orders have been placed. But it's a relatively small number when compared to other SUVs of this size.
The corporate statements would have us belive that it mainly has to do with increased sales. But that's not the case, as slowing demand actually forced the company to discontinue two Ibiza body styles alone. In fact, deliveries only grew by 1.5% in the period until September, reaching 319,900 compared to 309,400 units last year.
So, could 1,500 extra sales generate over a hundred million in profit? Of course not. In reality, SEAT's money stream likely has to do with two things, spending on options and building cars for Volkswagen Group. Let's not forget that SEAT's factories in Spain make popular Audi and Volkswagen models.
The large Alhambra MPV witnessed the most impressive growth, with demand jumping 23%. We've seen quite a few of these in showrooms, costing about $40,000 thanks to all the options and features that are shared with the VW Sharan. Very rarely do you see customers spending that much money on the Leon compact because it's not owned for that long and the equivalent Golf or Octavia makes a better family car.
SEAT President Luca de Meo underlined that “we are satisfied with the operating profit obtained in the first nine months of the year. The success of the Ateca can already be seen in these results and proves that our biggest product offensive in history will have a huge positive effect on strengthening the brand. The Leon, Ibiza and Arona will drive performance."
Core revenue was the highest it's ever been at 6.535 billion euros, up by 2.3% over the January to September period of last year. Certain markets, including Mexico, Poland, Austria and Turkey are starting to play an increasingly significant role in the automaker's business.
Of course, going forward, the Ateca will play its part. Even though it's only been available for a few months, over 30,000 orders have been placed. But it's a relatively small number when compared to other SUVs of this size.
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