The Volkswagen Group’s products spread far and wide, its brands spanning Bugatti to Skoda and embracing Bentley, Lamborghini, Audi, SEAT – and Volkswagen itself. Each brand has been developed to establish its own clear identity but uses appropriate Group-wide technologies to gain economies of scale. In general, this has been very successful although there is arguably some overlapping between the Audi, VW, and Skoda cars.
But one company that has had some difficulty in establishing its international marque identity is SEAT. In 1986, VW became the major shareholder in the Spanish company (which previously had a 30-year-plus association with Fiat) and took over 100% of it in 1990.
Its German owners had envisaged SEAT (Sociedad Españole de Automoviles de Turismo) as establishing a sporty image, with involvement in rallying and touring car racing creating for it a technological and glamour halo that would embrace its regular models. But the philosophy had varying results and SEAT’s position within the Group is, arguably, somewhat blurred.
But SEAT’s President, 61-year-old Erich Schmitt, is confident that the company’s position will come into sharp focus through advancing programs of quality improvement and fresh aesthetics.
However, image changes take time and for SEAT (more so than with some companies) comes the need to achieve this within a strictly limited financial dimension. The ultimate responsibility for achieving this rests with Schmitt, who moved from his previous position on the Audi Executive Committee with responsibility for Purchasing to become President of SEAT in October 2006.
"When I came to Spain, I immediately considered how I could position the SEAT brand," he said. "We have customers who are design and sporty oriented and we have those who are more traditional. And we have a certain price expectation from them all!"
Orders from Piech
Within the VW Group, buyers with more money may elect to buy Audis while those who are "price sensitive" will look to Skoda and SEAT, he said. What it all boils down to is that Schmitt has to design and build "sporty" cars at a reasonable price, but they also have to be practical and dynamically impressive to a broad clientele.
"My task for 15 years at Audi was to control cost, and my benchmark is Audi. At SEAT, I have to ensure that we have the best possible designed cars at the right cost level. We also have to improve the emotion of the brand," Schmitt explained.
Raising quality levels is also a must. Currently, he rates it as "good," but areas for further improvement include haptics and the precision of controls. The new Ibiza is the first example of how this is being successfully achieved, he noted. "The reputation of SEAT is not in line with reality, and we have to prove how good we are," Schmitt said.
Schmitt recalled when he was appointed to SEAT, Volkswagen AG Supervisory Board Chairman, Dr. Ferdinand Piech, told him: "It is not a SEAT, it is an Audi – you can manufacture an excellent car without additional costs."
That is why Schmitt’s benchmark is now Audi, where he said he learned the direction to take SEAT.
"For example, take a plastic bumper weighing 6 kg - its manufacture involves tooling, a molding machine (there are three or four manufacturers to supply that) and a painting process (there are two main suppliers for paint equipment – Dürr and Eisenmann) in the body shop, where we have robots from two or three suppliers worldwide," he said.
"Why should I expect any worse quality from any of them than I would see at Audi? Why should I, at SEAT, manufacture an inferior product? Now, I am achieving what I want," he acknowledged.
Better than Japanese quality
Schmitt said that it was necessary to "educate" teams to achieve what is needed from suppliers – and to develop challenging designs with engineers and manufacturing teams to see how to avoid additional cost.
Schmitt spends a lot of time with suppliers, particularly those in the JIT supplier park in the environs of the SEAT plant.
Switches and their operation provided an example of quality perception, he said, with the need to match tooling to the achievement of the required quality level. "At Audi, switches might be of aluminum and at SEAT of plastic, but the precision of the part has to be the same," he asserted.
As a car manufacturer, SEAT is relatively small, (2007 production was 412,946 units including exports to 72 countries). It uses VW Group engines, transmissions, and platforms, but with some 1400 engineers and 600-800 other specialists in Spain working on new projects, SEAT can give its products their own identity. The company does its own interior and exterior design work (Design Director is Luc Donckerwolke, who did the Lamborghini Gallardo and Murcielago) and all pressed parts are manufactured in its own facilities.
"We use the best things from Volkswagen, but we are free to make our own decisions," explained Schmitt. "We have to be proud to be a member of the Volkswagen family – but certainly not everything here comes from Germany."
The level of quality improvements being achieved is indicated by Schmitt's faults per 1000 vehicle charts. In 2002, it was 37; now it is 4.3, which he describes as being "better than most Japanese manufacturers."
Each day at 07.30, Schmitt meets all his managers including key engineers (up to 70 people in total) to review both the strategic and finer points of design and manufacture. Everything is discussed, and everyone can talk freely, he said.
The brand's image continues to expand in ways unimaginable a few years ago. SEAT has secured both the Drivers’ and Manufacturers’ titles in the 2008 FIA World Touring Car Championship (WTCC) after Rickard Rydell won Round 21 of the series at the Okayama International Circuit at the wheel of the Leon TDI.
This is SEAT’s first overall title in the WTCC and signifies the first time a diesel racecar has triumphed not only in the WTCC but also in any FIA championship.
So, will this manufacturer of cars that are mainly created to be sporty ever build two-seat sports cars as seen in past SEAT concepts to enhance its "auto emoción?" Schmitt is pragmatic, stressing that it did not make sense to present sports car and cabrio concepts that gave the impression they would make production.
"We could not achieve the cost level we need," he admitted. "However, it is something we might change by possibly finding ways with other brands in the VW Group to have exciting cars in small sequences. If we built a cabrio, maybe we could all share the same roof design but have a different body – remember what Luc Donckerwolke created at Lamborghini.
"Certainly we are going to see more sporty designs," Schmitt promised, "because they represent our philosophy to fit the segment – and they will do exactly that!"