11 May 2010


Celebrating 60 years of Seat

11 May 2010 - ¡Feliz cumpleaños Seat! Or, to put it another way, happy birthday Seat! The Spanish car maker is, this month, celebrating a big milestone in its history as it turns 60. The workforce at its headquarters in Barcelona stands at 11,000 with around 1,300 people working at the Technical Centre, the brand's research and development facility. The central production site is the Martorell plant, one of the most advanced in Europe, with its highly developed logistics systems and flexible production processes. Around 2,000 cars are built there every day.

The company was officially set up on 9 May when an agreement was signed between the public INI organisation (Instituto Nacional de Industria) with 51% of the share capital or 600 million pesetas (a sum equivalent to 3.6 million euros today), seven large Spanish banks (42%) and Italian car manufacturer Fiat (seven per cent), which contributed technical assistance and a manufacturing licence for its models.


The firm's new factory, built in Barcelona's Zona Franca next to the harbour, stood on a site of around 20 hectares. The choice of the Catalan capital as Seat's HQ wasn't arbitrary - since the beginning of the 20th Century Barcelona had been the country's car manufacturing hub; home to facilities of firms both home-grown (Hispano-Suiza, Elizalde) and foreign (Ford Motor Ibérica, General Motors Peninsular). The city therefore had an extensive industrial background and a pool of skilled labour.

The assembly line sprang into action in May 1953 and Seat's first car rolled off on 13 November. It was the 1400 A, a rear-wheel drive sedan with a four cylinder front-mounted 44 PS engine. Daily output was five cars and the Zona Franca workforce was 925 strong.

Strong growth followed but it was in 1957, when Seat launched the 600, that the brand really laid the firm foundations for its future success. The arrival of the 600 practically put Spain on wheels and the impact of this tiny, rear-engined, rear-wheel drive utility car on Spanish society is still under sociological analysis today. Not only was it the first car for many Spaniards, but it was an injection of quality of life that provided mobility and freedom like no other product in Spain had ever managed to do.


The appeal of the 600 lasted throughout the 1950s and 60s and this small car was lovingly dubbed simply 'seiscientos' in its homeland. It is to Spain no less than the Citroën 2CV is to France, the Fiat 500 to Italy, the Mini to the United Kingdom and the Volkswagen Beetle to Germany; a people's car. By 1973, a total of 800,000 had been built.

In the 60s early experiments with exports followed; hampered in part by Fiat demands that the 600 should be produced only for its local market. Nevertheless, the Spaniards found their first (tiny) loophole for the 600 and exported 150 units to Colombia. It was not until a later, more generous version of the licence contract that Fiat permitted more freedom; ultimately leading, between 1970 and 1973, to the Seat 600 becoming the best-selling car in Finland!

The new Seat 124 made its debut in 1968 and soon after the one millionth Seat was handed over to Rosa Zumárraga on the TVE game show Un millón para el mejor. The following year saw the debut of the 1430, another exclusive Seat model, and by the end of the decade Seat had consolidated its position as the country's leading manufacturer.


In 1971 Seat advanced to become Spain's largest industrial company and in 1974, with revenues of just under one billion dollars, it was number eight among Europe's vehicle makers. The number of cars on Spanish roads grew relentlessly. At the beginning of the 70s there were nearly 2.4 million, half of which carried the Seat badge. The brand had become the country's largest industrial company barely 20 years after it was set up. The range was extended with sporty versions of the 124 and the arrival of the 132, a high-end model that took over where the 1500 left off.

In tune with motoring trends of the time, Seat turned to front-wheel drive on the new 127 of 1972. It was soon joined by four- and five-door home-grown versions, without Italian counterparts.

The Martorell Technical Centre opened in 1975 to address the need for developing unique products. It became the breeding ground for the Seat 133, the company's first original design based on the platform of the 850, whose production was even licensed in Argentina and Egypt; the 52 PS 1,010 cc engine for the 127 Especial, another company first; and the daring 1200/1430 Sport, designed in joint collaboration with Inducar.


This coupé was quickly dubbed by locals the Bocanegra (meaning 'black mouth') because it has a plastic mask surrounding the headlamps and radiator grille that was always black, regardless of the body colour. Seat of course returned to this design theme in 2008 with the Bocanegra study and, in 2010, a special version of the Ibiza SC paid homage to the name with a partially black front end.

By the time the four millionth Seat had rolled out of the factory there were more than 1,000 dealerships nationwide. New models became available (128, 131, Ritmo) and existing ones were updated (127, 132).

But things weren't so rosy in the company's accounts. The 1978 balance sheet showed a loss of 10,374 million pesetas from a production of 288,487 cars. Lifting import restraints and the government's industrial policy greatly benefited the arrival of foreign companies. The INI and shareholding banks proposed a gradual sell-off of up to 81% of Fiat's stake over two years. Fiat accepted only after lengthy negotiations, with a series of conditions that included liberalising the price of cars, workforce reductions when necessary and economic guarantees from the State on requested loans.


Despite the prestige of its products, Seat proceeded cautiously into the 80s. Market share had decreased by a withering 26%, the workforce had been slashed and accumulated losses totalled more than 23,655 million pesetas in 1982.

Plunged into financial distress, Fiat decided not to endorse the second stage of capital increase at Seat. Instead, the companies finally reached an agreement whereby Fiat sold its shares for the symbolic price of one peseta and committed to buy 400,000 vehicles manufactured in Spain over the following five years and sell them through its own network under the Fiat name. At the same time, Seat gained the ability to export its own models not manufactured under Italian licence.

A crucial time had come for the Spanish brand to pick itself up, shake itself off and start anew, using all the resources at hand. Three models were developed in barely three years based on existing engines, and a totally new car was unveiled that was to become the company's greatest icon. Seat's renovation also includes a new blue corporate logo and the assimilation of Spanish city names for their models: Ronda, Malaga, Marbella, Ibiza...


Another positive development was the budding tie with the Volkswagen Group. Seat signed a distribution agreement for Audi and Volkswagen models through its dealership network and the production of the Polo/Derby and the Passat/Santana in Spain.

But if there's one car that identifies the dynamic, ambitious, gung-ho spirit of 80s Spain it's the Seat Ibiza. Mirroring the international party-going image of the Mediterranean island, its 1984 launch signalled a turning point in Spain's motoring scene.

It was the first truly domestic car created by Seat – designed by Giugiaro and, in some versions, powered by Porsche. And the key factor in its success was, indeed, that Stuttgart-designed engine range. The System Porsche legend embossed on some Ibiza engines reimbursed every penny of the German invoice back to Seat (and to the supplier a substantial royalty of seven German marks for every car sold).


After the then Volkswagen Chairman Dr. Carl H. Hahn persuaded Spain's socialist prime minister Felipe González to consent to the privatisation of Seat, the Wolfsburg group acquired an initial shareholding of 51% on 18 June 1986. Shortly before Christmas that same year this was increased to 75%. At the same time, the exports that were so fundamental to Seat finally started to flow.

For Seat, the 80s ended much better than they began. Production records were set at 474,149 cars yearly in 1989, and the company went back into the black. Seat contributed 15.2% of the Volkswagen Group's output – enough in 1990 to convince the management to purchase the remaining shares and take a 99.9% stake.

A new factory being built in Martorell was slated to become the brand's main production centre, and one of the most modern on the continent. Above all, and thanks to the impressive Ibiza, European drivers began to perceive the Seat name as a symbol of originality.


By now fully integrated into the German conglomerate, Seat removed the Group's other two big brands from its showrooms (Volkswagen and Audi) and stepped up development of its new range. Several motor shows witnessed the changing face of the first model wholly created using Volkswagen technology in the guise of the Proto C, Proto T and Proto TL concept cars. The Toledo, unveiled to the public at the 1991 Barcelona Motor Show, was a capacious saloon designed by Giugiaro.

1997 was the year of the Arosa, Seat's first sub-compact car, and the Cordoba Vario estate. Profits, output and morale all climbed through the rest of the decade and, in 1998, the second generation Toledo made its debut and the two millionth Ibiza rolled off the assembly line. Seat had announced a complete renovation of its model line-up in five years, and invested 200 billion pesetas in R&D – financed entirely by its own funds.

The dynamic line, Seat's now-trademark stylistic theme, was unveiled by the company's new design director Walter da Silva as he debuted the brand's future design course with his Salsa and Tango prototypes. At the same time, the model line-up underwent a substantial renovation. There were more Leon versions (Cupra, Cupra R and 150 PS TDI FR), the Alhambra and the Arosa were revamped, the third generation Ibiza and second generation Cordoba were introduced, and Seat Sport launched a limited series Ibiza Cupra R.


Finally, the new Exeo presented at the 2008 Paris Motor Show signalled Seat's move into the upper-medium segment.