Seat and Cupra suffer a 96% drop in profits

[alpineSi]

This cropped up in my Spanish newsfeed. I've not seen it here, so apologies if it's a repost.

Seat and Cupra recorded a 96% drop in their operating profit through September, reaching just 16 million euros compared to 406 million during the same period in 2024. The company entered into operating losses during the third quarter with -22 million euros, contrasting with the 9 million euros profit from the previous year.

Startling figures, but there's obviously more to it when you read into it.

Source: Europapress (in Spanish)

 

[Paul_cz]

How is that even possible? This seems like an insane drop.

 

[Tell]

I was keeping quite about that.

 

[tracktoy]

SEAT S.A. sales revenue grows 2.4% in Q1 2025 to 3.9 billion euros, driven by recent CUPRA launches

SEAT S.A. sales revenue reached 3.895 billion euros between January and March 2025, up 2.4% compared to Q1 2024 (3.803 billion euros). This figure, driven by the success of recently launched CUPRA models, represents a new record for the company for a first quarter in which deliveries also...

www.volkswagen-group.com

The company reported an operating profit of 5 million euros in the first quarter of 2025, a decline of 221 million euros compared to the same period last year (Q1 2024: 226 million euros). This decrease can be attributed to several factors, including higher proportion of BEV vehicles in the sales mix and European import duties on the CUPRA Tavascan, which is produced in China. Additional pressures arose from a complex global environment and intensifying competition, particularly in key electric vehicle markets. As a result, operating return on sales dropped to 0.1%, a decrease of 5.8 percentage points compared to Q1 2024.

And whilst they (seat cupra) are trying to sell more motors the likes of BYD are producing cheaper and (if sales are anything to go by) better motors

 

[alpineSi]

The curious part if you just look at the numbers is they sold slightly more cars and had slightly higher revenue, but made considerably less profit. Seems VW share prices have barely budged, so it's presumably all fine...

 

[Tell]

SEAT S.A. sales revenue grows 2.4% in Q1 2025 to 3.9 billion euros, driven by recent CUPRA launches

SEAT S.A. sales revenue reached 3.895 billion euros between January and March 2025, up 2.4% compared to Q1 2024 (3.803 billion euros). This figure, driven by the success of recently launched CUPRA models, represents a new record for the company for a first quarter in which deliveries also...

www.volkswagen-group.com

The company reported an operating profit of 5 million euros in the first quarter of 2025, a decline of 221 million euros compared to the same period last year (Q1 2024: 226 million euros). This decrease can be attributed to several factors, including higher proportion of BEV vehicles in the sales mix and European import duties on the CUPRA Tavascan, which is produced in China. Additional pressures arose from a complex global environment and intensifying competition, particularly in key electric vehicle markets. As a result, operating return on sales dropped to 0.1%, a decrease of 5.8 percentage points compared to Q1 2024.

And whilst they (seat cupra) are trying to sell more motors the likes of BYD are producing cheaper and (if sales are anything to go by) better motors

Yes that's where I saw that one yesterday. I didn't think BYDs looked so sexy. I had great hopes for the Tavascan but if it's effected by dodgy systems as the others. Reliability verses sexy . Came across a glowing long term ID4 review yesterday and they liked it, build quality etc. Another axis on Reliability v Design and that's price. China will always beat on price. Perhaps the Chinese Vag engineers can sort out the Vag software engineers .

 

[Tell]

The curious part if you just look at the numbers is they sold slightly more cars and had slightly higher revenue, but made considerably less profit. Seems VW share prices have barely budged, so it's presumably all fine...

They might have been paying out on dodgy motors. Dieselgate etc. Probably have to look at the accounts.

 

[tracktoy]

They might have been paying out on dodgy motors. Dieselgate etc. Probably have to look at the accounts.

Dont forget they also had to pay import duties on the Chinese Tavascan so that hurts bottom line.

 

[Tell]

Dont forget they also had to pay import duties on the Chinese Tavascan so that hurts bottom line.

10%. I think we are free of that. But there wont be many Tavascans sold so it's not that. There must be some cost that they have written down. In other words it's costing them internationally, a drain on their profits. Another way of looking at is that their books might have been massaged but arent now. That old one where you write down the capital cost of equipment as revenue.

 

[tracktoy]

I have not looked at the financials and to be honest I cant be bothered as VAG Group are going to suffer till they work out how to compete with the new imported models, however the AI Summary on the google search shows the following

SEAT and CUPRA Profit Overview​

Financial Performance​

Metric	Q1 2025	Q1 2024	Change
Operating Profit	€5 million	€226 million	-97.7%
Revenue	€3.895 billion	€3.803 billion	+2.4%
Vehicle Deliveries	146,700	138,600	+5.9%

Factors Affecting Profitability​

• Tariffs: European import duties on the CUPRA Tavascan, produced in China, have significantly impacted profitability. The tariffs total 30.7%, with 20.7% being additional charges.
• Sales Mix: A higher proportion of battery electric vehicles (BEVs) in the sales mix has affected operating profit margins.
• Market Conditions: Increased global competition and a challenging economic environment have also contributed to the decline in profits.

CUPRA's Performance​

• CUPRA achieved record sales, delivering 78,300 vehicles in Q1 2025, a 38.3% increase from the previous year.
• The CUPRA Formentor remains the best-selling model, with strong demand for the CUPRA Born and the new CUPRA Tavascan.

Despite the growth in sales, the overall profitability of SEAT and CUPRA has been severely affected by external economic factors and internal challenges.

 

[Tell]

Suspect the AI has gone off on that you have to look at their accounts. AI is push a button text. The Tavascan will only be a small part of their income. Suspect they have changed their accounting practices. Probably a finance house briefing paper on what went wrong with VWs profit margin out there somewhere. They all have financial analyst that spill the beans.

Possibles

https://uk.investing.com/news/earnings/middlesex-water-earnings-missed-by-010-revenue-fell-short-of-estimates-4340561

Blame it on Porsche restructuring. American tariffs.

Seems to have been going bad in each Quarter

Google Search

Mind you I still say they shot themselves in the foot with the Seat / Cupra separation, dealer network separation so they might be making a profit on Cupra but a loss on Seat. That's a microcosm of the bigger issue.

 

[tracktoy]

I am afraid I still suspect that they are suffering from the Chinese competition (who we have seen are selling many more motors), added then to the cost of import duties (which I guess have to be paid upfront before the motors are sold) and cost of development of the restructure of Seat Cupra.

Time will tell us.

 

[jezyg]

The global chip shortage pushed up car prices by limiting supply, but even as chip costs eased, manufacturers kept prices high. Many chose to prioritise profit margins and limit production rather than return to pre-pandemic pricing levels. This has contributed to a decline in private new car sales, as affordability remains a major barrier for consumers. We than have inflation and higher borrowing costs as well. I would love to know where VW finance sits in all of this? I know lost of early Borns won't meet there GMFV so there is a right down there, they generate a decent revenue stream for the brand (or did).

At the same time, the UK’s ZEV Mandate requires a set percentage of EV;s to be sold. To meet these targets, some manufacturers are now heavily discounting EVs. Sometimes selling at cost or with minimal margin; to avoid penalties and secure compliance credits.

Add in the ever increasing Chinese competition which makes European cars look expensive and under specced. You have ended up with high prices for petrol and diesel vehicles, softening private demand and electric cars being pushed out at aggressive prices to meet regulatory quotas reducing profits. Add in Euro 7 which demands less particulate matter ie brake dust the only way around that is regenerative braking like in an EV. So pushing costs up further too as will mean mild hybrid as a minimum. It is a perfect storm and some manufacturers may well go pop.

We are in a strange financial time's though and I highly recommend reading the Unaccountability Machine by Dan Davis. With AI literally taking jobs and then quantum underpinning AI in the next three to five years there is another seismic shift coming - does VW now uses AI for its accounts or forecasting?

 

[alpineSi]

Mind you I still say they shot themselves in the foot with the Seat / Cupra separation, dealer network separation so they might be making a profit on Cupra but a loss on Seat. That's a microcosm of the bigger issue.

Is this a UK thing? All my local dealers (in Spain) sell both brands (and many have VW, too). Skoda and Porsche always get their own places, though.

 

[alpineSi]

There's a selection of related articles blaming Porche for VAG's woes here.

"As part of the realignment of its product strategy, Porsche plans to complement its product range with additional models with combustion engines and plug-in hybrids," explained Porsche's Chief Financial Officer, Jochen Breckner. This change of direction has generated extraordinary expenses of approximately 3.1 billion euros for 2025 alone, with related costs and amortizations totaling 4.7 billion euros for the entire Volkswagen group."

 

[Tell]

Is this a UK thing? All my local dealers (in Spain) sell both brands (and many have VW, too). Skoda and Porsche always get their own places, though.

Probably big dealerships in Spain,

2022 UK dealership nuumber:

How many car dealerships are there in the UK? Exclusive list of every franchised car dealer in 2022

More than 200 franchised car dealerships closed last year as manufacturers slashed their networks. In total, 202 sites were lost taking the number of UK

cardealermagazine.co.uk

Then there were half the number of Cupra dealships to Seat. Shooting yourself in the foot if you also reduce the product range in Seat models. It was suppose to be finished running out on old models... now we know it will be switching to hybrid as 2035 approaches but wont have EVs. Cupra is the place for them.

 

[Tell]

There's a selection of related articles blaming Porche for VAG's woes here.

"As part of the realignment of its product strategy, Porsche plans to complement its product range with additional models with combustion engines and plug-in hybrids," explained Porsche's Chief Financial Officer, Jochen Breckner. This change of direction has generated extraordinary expenses of approximately 3.1 billion euros for 2025 alone, with related costs and amortizations totaling 4.7 billion euros for the entire Volkswagen group."

Seem to be an element of chopping and changing in strategy. Someone in Vag hasn't got their finger on it.

 

[Tell]

Bit more here. Choppy seas .

Volkswagen posts 1-billion-euro loss on tariffs, Porsche woes https://share.google/yoTNRRaPvMPuNOurg