Seat to make its new SUV at Skoda factory image

The Spanish automaker is today the only loss-making brand at the Volkswagen Group, and the company is seeking a complete return to profit soon, through many cost cutting measures.

According to Seat’s chief executive, the automaker would utilize idling capacity at a plant run by the Czech brand Skoda, building its future SUV model in a country with low labor costs as a measure to accelerate the brand’s turnaround.

“There was capacity available in Kvasiny, Skoda’s Czech plant and we’re glad we can use it. It’s a very cost-efficient factory,” said Jurgen Stackmann, Seat’s CEO. “It’s an extremely important step for us to be present in the compact SUV segment,” he added.

“Next to labor costs, capacity utilization is a significant factor,” Daniel Schwarz, an analyst at Commerzbank in Frankfurt, said. “Volkswagen’s modular production technology gives it the flexibility to optimize capacity use more than at other carmakers. They can produce Audi models at Seat factories and now, it seems, Seat vehicles at Skoda.”

According to the company, the final design for the new SUV is finalized, so they have moved along with engineering problems in light of the decision to build it in the north-central Czech town of Kvasiny, where Skoda also manufactures its own SUV – the Yeti. Seat plans its new SUV to reach the market by 2016.

Via Automotive News Europe