In a bid to secure returns that are 'significantly' greater, they are planning to concentrate on the small car and lower-medium sectors.
SEAT UK director John Abbott said: 'As a relatively small company, it is impossible for us to fight every battle. We've taken a hard look at the upper-medium sector and decided the level of support that's now needed to sell the product there is ridiculous. The situation has run out of control and has become so cut-throat.
'That means that next year, most of our efforts will be invested in the Ibiza small car and the Leon, our lower-medium hatchback.'
At the international launch of the new Arosa supermini - the Barcelona company's sixth totally revised product in 25 months - Abbott said: 'Rather than slog it out with the volume makers, we've cut the Toledo range and better targeted user-choosers who want a four-door saloon that's a little different and very good value.
'Now we have secured better supply with the Leon, our next move is to step up our efforts with the hatchback, which we see as a good proposition in a sector that accounts for more than 600,000 registrations each year and is growing.
'This is our new centre of gravity. Many buyers of traditional family cars are now opting for smaller hatchback models that are more sophisticated and more refined. These cars also have better residuals.'
Abbott said he expected the 45 outlets in SEAT's 130-strong UK network operating business centres to put the top Leon 20V T model with potential fleet customers in the next few months.