SEAT to build new Audi A1 in Martorell plant

The €4.2 billion investment announced by the Volkswagen group for its factories in Spain includes several new projects for SEAT that are already taking shape. The subsidiary will receive 80% of these resources, some of which will be funneled to prepare the Martorell facilities for the manufacture of new models. This newspaper has learned that one of these new projects is the new Audi A1. Although this has not yet been officially announced, SEAT has already allocated financial and production resources to it.

Sources close to the company are certain that the arrival of the A1 is a fact: currently there are studies underway on the cost of producing the new small Audi at the Catalan plant and how the facilities will need to be renovated. The same sources confirm that the project is a done deal and estimate that the announcement could be made in the third quarter of this year. Volkswagen, however, has not yet officially made any definitive decision about this project, according to a SEAT spokesperson.

The Audi A1 is currently built in Belgium, but the Volkswagen group has already told workers there that the model will be moving to Barcelona. The Belgian plant will take on other projects. ARA has learned that Volkswagen will invest €500 million there to adapt the facilities for production of an electric vehicle.

The Audi model fits very well in Martorell and solves a part of the puzzle that Volkswagen is currently faced with. Coincidence or not, the SEAT Ibiza is nearing time for its renovation, and the future generation of the model --which should come to market in 2018-- will be built on a completely renovated production line that will require a major investment. The construction projects will consist of implementing a modular manufacturing system, which will allow for greater flexibility in manufacturing different models on one single line-- at least when the cars share a similar platform (that is, when the skeletons of the cars are of a similar size), as in the case of the Ibiza and the Audi A1, our sources explained.

The arrival of the new Audi A1 model is a show of confidence by the leadership of the Volkswagen group and endorses the good results of the Audi Q3, which in 2011 was the first model from the German brand to be manufactured in Martorell. Last year nearly 113,000 units of the Q3 were manufactured, 8% more than in 2013.

It is increasingly common to see this kind of productive exchange between brands of the group, thanks especially to this new manufacturing system, which is more versatile and allows for cost savings in plants worldwide. As a result, announcements of new models are often made in two steps: the first is when the top brass in Wolfsburg okay the manufacture a new model by one of the group’s brands, and the second is when management decides which plant will build the new vehicle in question.

This is exactly what happened with SEAT’s first SUV ever, which will be on sale starting next year. The brand got Volkswagen’s approval to add the new model to the company’s offerings starting in 2016, although the model was not assigned to Martorell, but rather to a Skoda plant in the Czech Republic, which will also produce a Skoda model of the same style on the same production line.

New range of SUVs

The arrival of the new model will be good news for Martorell after the disappointment of losing out on the SUV. It will be essential to fill the plant and bring it to 100% of productive capacity, as management intends to, with more than half a million units per year. Last year some 443,000 units came out of the factory. This year, in addition, the plant will lose a model when production ends for the SEAT Altea, which will continue to be sold until the end of this year.

The SUV that will be sold starting in 2016 will have to become a driver of sales for SEAT and the reason for the brand to advance in a segment that is having great success throughout Europe (SUVs have seen the highest sales growth in recent years). For this reason Jürgen Stackmann, President of SEAT, is quite open about his plan to build a short range of SEAT SUVs in the mid-term.

A year ago, Mr. Stackmann himself explained that the brand was working on a smaller SUV than the first models to reach the market. This smaller sister model is projected for 2018, but as yet there is no decision as to whether Volkswagen will authorize it. In addition, this year the brand has gone further and presented a prototype for a larger SUV (the 20V20), which could complete this hypothetical family of four-by-four vehicles. In this prototype, design changes are hinted at that might be seen in future vehicles, which the brand will bring to market in the next five years, among which are the first SUV and the new Ibiza.

The SEAT technical center will be one of the main beneficiaries of the multi-million euro investment announced by Volkswagen. R&D is one of the priority areas for the more than €3 billion that the German consortium will pour into Martorell between now and 2019. The technical center is the brains behind SEAT design, but is also dedicated to projects for the entire group. Nine hundred engineers work there, and are in charge of technical innovation and the design of future vehicles.