SEAT threatens 1,500 layoffs in Martorell

The European car industry faces an uncertain future. In the roderas of the complicated path of electrification of its catalog, the obstacles of the Chinese electric car have been crossed and, now, the US tariff threats.

In that scenario, the European Union has imposed an additional tariff of 20.7% to electric vehicles manufactured in China. The bad news is that this climb has not only affected Chinese manufacturers cars. Seat has been trapped In the midst of this regulation with the Tavascan cupra.

The Tavascan coupra shoots. He Cupra tavascan, He was the first electric “rebel” brand of Seat. The Cupra Electric Model It is assembled In the factory that Volkswagen has in Hefei (China). Therefore, even if it is a European brand, the same tariffs are applied as to the rest of Chinese brands.

That has made its cost, which already assumed a 10% tariff already existing, you have to add an additional 20.7% that the EU has imposed to cars manufactured in China that entered into force at the end of 2024. This raises the total tax at 30.7%, which seriously affects the profitability of this model whose price ranges between 41,000 and 53,000 euros.

1,500 jobs at stake. The domino effect of the fall in the profitability of the model that was going to mark the passage of the company’s electrification, has caused the company to rethink the strategy by reducing the production of cars in its Martorell factory.

Wayne Griffiths, CEO of Seat, assured To the agency Reuters That, if these tariffs are not reduced to Tavascan before March 2025, the company would be forced to cut 1,500 direct jobs and up to 10,000 indirects related to suppliers of the Catalan factory. This figure doubles the initial estimates of the unions. Matías Carnero, president of UGT of Catalunya pointed out In an interview for Eldiario.es that “were in danger between 600 and 700 jobs” due to tariffs.

EMISSION OBJECTIVES add more tension. Seat’s situation is aggravated with the need to fulfill Pollutant emission objectives established by Brussels. This directive forces SEAT to reduce vehicle production with combustion engines and reconsider its commercial strategy given the economic unfeasibility of its electrical models by tariffs.

In this context, the company is negotiating with the European authorities to make the emission regulations more flexible and mitigate the economic impact and avoid more labor cuts. “We don’t have much time. We need to reach a solution in the first quarter.” Griffiths pointed out in statements to Reuters. “We cannot solve it overnight,” said the SEAT manager, highlighting that to comply with the regulations, they had to develop synthetic fuel engines.

A new stick on the wheels. Seat did not come from marking its best financial figures, so the impact of tariffs is not the only challenge that arises in the future of Seat. In the third quarter of 2024, sales had already fallen 4%, attributed to macroeconomic factors such as global instability. The company had already announced Reduction of about 90,000 units in the Martorell plant, which represents a 17% cut in its production

The Catalan factory is a key piece for Seat, since it manufactures models such as the Formentor, León and Arona coupra, in addition to the Audi A1. The brand assured in its Annual 2023 report produce more than 443,400 units in that factory. However, economic difficulties have already led Seat to apply different rounds of layoffs since 2022. If an agreement with the EU is not reached, the dismissals will continue in the Seat’s flagship factory.

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Image | SEAT