VW's SEAT car unit posts record profit of €371m at half-way stage
Volkswagen this week lowered its 2023 deliveries outlook, citing uncertain economic times, but it aims to improve its cash flow as it hikes prices and cuts costs.
Volkswagen's Spanish unit SEAT posted record first-half profit and sales, fuelled by its high-end Cupra brand, even as supply disruptions kept production 10% below goals, but expressed concern about demand in 2024.
It swung to a profit of €371m from a year-ago loss of €97m, while revenue rose 38% to €7.4bn. Combined sales of SEAT and Cupra brands grew 28%, with the latter alone rising 57%.
"It's the quality of our business, of turnover and profitability that is driving our result up and not just pure volume," SEAT chief executive Wayne Griffiths told Reuters, saying the focus on more expensive cars and cost discipline was "really paying off".
He said he was confident SEAT would maintain first-half pace of growth in the full year, but acknowledged concerns that demand could falter next year amid geopolitical and economic uncertainties. Griffiths cited growing competition between the US and China, rising interest rates, as well as high energy costs and inflation.
"Just with interest rate increases, that amount for most family households is what they would be basically spending on a car," he said in Barcelona. "Suddenly you become one of the things on the list that perhaps could be cut."
Volkswagen this week lowered its 2023 deliveries outlook, citing uncertain economic times, but it aims to improve its cash flow as it hikes prices and cuts costs.
Mr Griffiths said semiconductor supplies had improved, but production was still affected by a shortage of mechanical parts and an increase in raw materials and transport costs.
He said Cupra was "still on an exponential growth path". SEAT has sold over 400,000 Cupra cars since launching the car in 2018 and aims to sell 500,000 annually in the medium term.
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