Fleet News

Luca De Meo: ‘The timing is now right for the Ateca’

Late to the SUV party, the Seat Ateca should build on the success of the Leon, but there are no plans for a sports car anytime soon says chief executive Luca De Meo.

The popularity of SUVs has been growing in Europe for many years, and you would be forgiven for wondering why it has taken until now for Seat to get in on the action.

The Ateca SUV is derived from the same platform as the Leon, and UK deliveries will begin in September. But it is likely to be the first of a family of crossover models from Seat, with a smaller Nissan-Juke rival due in 2017, and a larger SUV expected by 2020.

The Leon X-Perience, introduced last year with raised ground clearance and some off-road ability in a high-specification version of the Leon ST, has given us a taste of what to expect.

Chief executive Luca De Meo sees SUVs as crucial for boosting user-chooser interest in the brand. He has headed Seat for seven months, following a management restructure within the Volkswagen Group in the aftermath of 2015’s emissions scandal.

De Meo has experience at a number of other manufacturers outside the group (including Renault, Toyota and Fiat), which many see as beneficial to taking the newly profitable Seat into fresh market sectors, and creating vision

Factfile

Company: Seat

Chief executive: Luca De Meo

Time in role: Seven months

2015 fleet sales: 8,568 (2014: 8,315)

2016 fleet sales to date: 3,042

Key fleet models: Leon, Ibiza, Ateca, Alhambra

“I’ve been here six months,” says De Meo, who was previously sales and marketing director at Audi. “I had a certain perception of the brand; a certain expectation. But I have to say, it feels like there is a clear mismatch between the brand and its perception.

“My predecessors did a good job giving me a solid base from which to work. We’re now making a profit and hopefully there will be a snowball effect. Previously, we hadn’t made money for seven years.

“The company is at the start of a big change in its product portfolio.  Sometimes you need to be lucky, and I’m optimistic we can move the company forward.”

He said the timing is now right for the Ateca, pointing to a shift in perception delivered by the current Leon after it was launched three years ago. Its popularity has enabled the brand to boost sales and increase its C-sector price point, enlarging its “centre of gravity”, as De Meo puts it.

“The Ateca is a way of consolidating the step we took with the Leon,” he says. “From a financial perspective, an SUV gives us a healthier margin and can contribute further to our profits. We also see it as a user-chooser opportunity, and our partners will see we are offering products for the market right now.”

Once described as a ‘Spanish Alfa Romeo’  – attributed to former Volkswagen Group chairman Ferdinand Piech – De Meo, a former Alfa chief, is quick to quash talk of likening Seat to other car manufacturers. “We are not the ‘Spanish Alfa Romeo’,” he says. “That doesn’t say the right thing about us. Alfa Romeo has a very different history from ours, and history is the only thing you cannot recreate. I see the charm of the idea, but we must go our own way.

“People should expect emotion and warmth from Seat, but likening us to other brands is the wrong approach.”

One element clearly missing from the line-up of a brand that plays on emotion and performance is a bespoke sportscar. De Meo says we are unlikely to see one anytime soon, if at all.

“We can’t afford sportscars,” he says. “We’d rather bet on models that bring profitability. Sportscars only tend to sell well in the UK.

“From a brand position, the Ateca will move us to the centre. The ‘boy racer’ positioning of some of our other products kept us in a corner. An SUV can be sporty. I believe it’s a modern interpretation of a high-performance car – and it’s also a global trend.”

This raises the idea that, as a differentiator from other Volkswagen Group SUVs, it’s possible that Seat could create a niche for affordable high-performance variants wearing Cupra badges. But Seat has also succeeded in making older segments work, such as in the Alhambra large MPV, strengthening its case for a position in the Seat of the future.

“There is still a future for the Alhambra,” says De Meo. “We didn’t really expect it to continue to have such a strong business case. One of the reasons could be that a lot of rivals have abandoned the segment, so we see a place in our line-up for it for the foreseeable future.

“However, there is potential for having a seven-seat SUV in the future.

“You will have seen the 20V20 concept at Geneva. It shows the direction we are planning to go in the next five years.

“But we also need to consider how far we can stretch the brand in terms of our price point. We have to ask ourselves if we are credible in that price range [£30,000-£40,000 in the UK] today. Right now it’s an idea that’s on the table,” he adds.

De Meo’s point on credible pricing also influences his view on adopting alternative fuels, potentially delaying the appearance of fully electric Seats.

“Emissions regulations are evolving and it’s forcing us to think seriously about it,” he says. “The targets for 2020 and 2025 will have to be achieved using alternative fuels.

“But because of our market position, we have to ensure our prices are reasonable in the segment. Seat probably won’t be a front-runner in electric vehicle technology, but we still have a target to meet.”

The introduction of Seat SUVs marks a higher level of confidence in the brand within Volkswagen Group. Sales across Europe had been declining from 2006 (385,000) to 2012 (261,000). Although in the UK it has always performed better than in Europe as a whole, the company overall spent seven consecutive years without making a profit.

The current Leon marked a turning point in the brand’s fortunes, which is now being rewarded with greater independence and investment.

But this also requires a better definition of what Seat stands for, and De Meo is working on establishing that.

 “We have been able to make these developments because of the work done by my predecessors,” he says. “When we deliver on our promises it gives the management more confidence in us. We gain credibility within the group and we are able to fund projects from our own profits.

“We are in a strong position, being able to use group technology. After a period of strong centralisation, there has been a decision to give the brands a bit more independence.

“For me, it’s a big opportunity, but also a big responsibility. We are trying to make Seat more unique. When we’ve asked ‘what is the purpose of Seat?’ there hasn’t been a compelling answer. Now it’s time to answer that. We have ideas and can afford the luxury of thinking about our purpose. And the group wants us to find it.

“Up to now, the reasons people usually chose a Seat were, to put it bluntly, because it’s a Volkswagen that was cheaper and had a sportier design. That can work maybe for selling 400,000 cars a year, but it doesn’t stick in the minds of consumers.

“We need to find this distinctive proposition across the whole business so it can come out from the shadow of the other brands,” he adds.


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