Seat returns to profit for the first time since 2008 image

After a long troublesome period, VW’s Spanish unit reported its first profitable year since 2008 and it expects this growth to continue.

Seat has been going through a turnaround cycle, in which it has shifted its focus from the sporty and youthful models to the mainstream segments to trigger a growth response in sale numbers and to bring higher contribution margins. The brand announced on Wednesday it closed 2015 with a profit after-tax of 6 million euros (6.65 million dollars), compared to a 66-million-euro loss (73.2 million dollars) in 2014 and posted a turnover of 8.3 billion euros, 11 percent more than the previous year, while average earnings per vehicle increased by 3.5 percent. This was the company’s best ever result and double the revenue in 2009. “Seat’s progress in 2015 was twofold – not only did we obtain a positive result for the first time since 2008, but we achieved it during a year of major challenges,” Luca de Meo, company’s CEO, said during the presentation of the 2015 annual results. “We are implementing the right strategy that enables us to face the challenge of sustaining long-term profitability with optimism. We have a brilliant future ahead of us thanks to the launch of new products and the integration of new technologies in both the field of mobility as well as connectivity.”

The growth in sales for the third year in a row, exceeding the 400,000 vehicle barrier in a single year, was due to a comeback in the southern European markets such as Spain and Italy, the fifth consecutive year of growth in Germany, Seat’s main market, and the brand’s success in Mexico, the automaker said. In 2015, Seat spent 586 million euros on investments and R&D, 28 percent more than in the previous year. Over the last five years, SEAT’s investment effort in this area has totaled roughly 2.7 billion euros. Overall, the operating result improved from a negative 167 million euros a year ago to -7 million euros. The automaker expects to expand its growth in 2016 driven by the newly launched Ateca SUV.