SEAT, S.A. – Ownership

SEAT Ownership

Spanish Automotive SEAT, S.A. was founded by the Instituto Nacional de Industria (INI), Spain on May 9, 1950 which is currently a wholly owned subsidiary of German Volkswagen Group.

Partnership with Fiat

Just after the end of World War II country was in need of remodelling the fundamental structure of its national economy which led to the birth of SEAT after almost a year and half, when the Spanish government and six Spanish banks (‘Banco Urquijo’, ‘Banco Español de Crédito (Banesto)‘, ‘Banco de Bilbao‘, ‘Banco de Vizcaya‘, ‘Banco Hispano-Americano’ and ‘Banco Central’) signed an alliance contract with an Italian car manufacturer Fiat on October 26, 1948 so as to form a partnership with a foreign ally in order to bring to life Spain’s major car manufacturer. World War II had also damaged Italy’s economic structure which made Fiat interested opportunities outside Italy, meaning the negotiation was easily in favour of Spanish interest in Italian manufacturer than with those from other countries.

Seat 1400 A – First car produced by SEAT with Fiat (Image 1)

The SEAT project was revived by Banco Urquijo group and within a year negotiations ended successfully with signing of a three part contract, with an understanding that the INI would hold a 51% of controlling interest as well as ruling act in the new company preserving a focused approach of the enterprise in the ‘national interest’. The Banco Urquijo group being a minor share holder looked forward assuming a leading role in the future. Italian Partner Fiat was offered a 7% share in exchange of its technical assistance.

Seat enjoyed good relations with Fiat, with the Spanish firm building many rebadged models such as this 127 (Image 2)

From a period 1953 to 1965 the firm only produced for domestic markets, In order to form a global distribution network for its cars SEAT reached a deal over renegotiation of its license contract with Italian car manufacturer Fiat on December 6, 1967, ending restriction over exporting SEAT cars out of Spain, a term previewed in the original license contract with Fiat since 1948 which resulted exporting massively to more than twelve countries. In exchange to that Fiat would increase its holding from 7% to 36%, on other hand the share held by INI was decreased from 51% to 32% and the remaining 32% was taken by the six Spanish banks.

Fiat now was seen to take control over the business, to help growth of SEAT the deal also included various undertaking by Fiat. SEAT also founded a customer financing company named ‘Financiera SEAT, S.A.’ (Fiseat) on December 6, 1967.

Dispute with Fiat

In early 1980’s, Seat was in need of major capital investment due to which discussions regarding funds took place between SEAT’s major shareholders Spanish government and Fiat. Fiat’s interest of funding faded, partially due to the oil crisis of the 1970s and also the uncertainty following the end of the protectionist policy against GM in Spain. This led to the end of the relationship with Fiat in 1982 which was marked by change in SEAT’s logo in same year.

Volkswagen Group Subsidiary

In 1982 After Fiat’s withdrawal of relationship with SEAT, the chairman of the Volkswagenwerk AG (Volkswagen Group), Dr. Carl Horst Hahn grabbed the opportunity to expand the Volkswagen Group’s operations out of Germany and transform German Group into Global force by approaching SEAT.

This sooner resulted into an Industrial and commercial cooperation as well as a license agreement with SEAT on September 30, 1982 for the production of Volkswagen Passat-Santana and Polo-Derby models in SEAT’s Zona Franca and Landaben factories respectively

In order to adapt the assembly line of Landaben plant for the production of VW Polo, the production of SEAT- Panda came to an end on April 29, 1983. Later on June 16, 1983 a partnership deal was signed between two parts being represented by the president of SEAT Juan Miguel Antoñanzas and Carl Hahn on behalf of the Volkswagenwerk AG.

On June 18, 1986, The Volkswagen group became the major shareholder of SEAT after a purchasing 51% majority stake of SEAT followed by the increase of its share up to 75% on December 23. In December 1990 the Volkswagen Group acquired 99.99% ownership of the company, making SEAT the first non-German wholly owned subsidiary of the Group, fulfilling Hahn’s expectations, This resulted in profit for SEAT and also provided a low-cost manufacturing outlet for other VW group models, contributing up to 15.2% of the VW group’s total output in 1989.

On December 23, 1993, a new company to hold the management of the Landaben factory separating any ties to SEAT in production matters named ‘Fábrica Navarra de Automóviles, S.A., with its shares being transferred to Volkswagen on June 1994 over which however SEAT would regain ownership four years later in 1998.

In 1994 the Design Center in Sitges, Spain and the suppliers’ park in Zona Franca were also inaugurated, and in winter of the same year SEAT’s financing and leasing companies Fiseat and Liseat were sold to ‘Volkswagen Financial Services AG’. During 1994, SEAT manufactured a 5 door prototype model with collaboration of Suzuki to make it a city car which never hit the production line.

SEAT presented a modern stylised logo In March 1999 at the Geneva Motor Show, more rounded compared to the last one and with the use of the silver colour on a red background.

SEAT Logo 1999 (Image3)

From 2002 up to 2007 SEAT formed part of the Audi Brand Group, the Volkswagen Group’s automotive sub-division, consisted of Audi, SEAT and Lamborghini, that was focused on more sporty values, with the marque’s product vehicles and performance being under the higher responsibility of the Audi brand.

References:

– http://en.wikipedia.org/wiki/Volkswagen_Group

– http://en.wikipedia.org/wiki/Fiat

– http://en.wikipedia.org/wiki/SEAT#Volkswagen_Group_subsidiary

– http://en.wikipedia.org/wiki/SEAT_1400 (Image 1)

– http://home.bt.com/pictures/motoring-news/seat-at-60-41363850326357 (Image 2)

– http://brandingsource.blogspot.co.uk/2012/10/new-logo-seat.html  (Image 3)

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