SEAT Pulling out of SA

[freerider]

To all employees



The Board of VW of SA, in conjunction with the Board of SEAT Spain, have taken the decision to withdraw the SEAT Brand from South Africa. This process will take place over the balance of 2008. The decision to withdraw SEAT from our market in South Africa was taken after much deliberation and in the interest of the Brand and our Company's future planning.



The press release below will be distributed to all media this afternoon at 16h00.





Volkswagen of South Africa to cease new SEAT vehicle sales operations by the end of 2008



Volkswagen of South Africa, owners of the SEAT Franchise in South Africa, will start a process to cease the SEAT new vehicle sales operations in South Africa.



“Current and expected circumstances make the ongoing importation of a niche brand in the South African market non-viable,” explained Mike Glendinning, Director of Sales and Marketing, VW of SA.



“Volkswagen of South Africa will continue to provide comprehensive after sales support for the 2 600 SEAT models sold since launch in June 2006. SEAT customers are currently being informed that continued after sales service will be offered by a dedicated group of Volkswagen dealerships in South Africa. These dealerships currently service SEAT vehicles. All warranties, service plans and roadside assistance relevant to the SEAT Brand in South Africa will be honoured."



“Of paramount importance to us is the continued after sales care of our existing SEAT customer base. We will offer all existing SEAT customers a preferential deal, on the purchase of a new Volkswagen,” committed Mr Glendinning.

ENDS.





Attached, please find a detailed Q & A that covers any issues which might require clarity.



Kindly refrain from any interaction with the media regarding this decision. All media queries should be directed to Bill Stephens.



If you have any questions regarding this decision to withdraw SEAT, please email these to Bill, who will address them as soon as possible.





Issued by:
Communications Division






SEAT Exit from South Africa – Q & A


1. What was the key reason for Volkswagen of South Africa to
withdraw SEAT from the domestic market?

Current and expected circumstances in the volume segments of the passenger car market in South Africa are not conducive to the ongoing importation of a niche brand.


2. How many customers have been affected by this decision?

We have sold approximately 2600 SEAT models since
launch in June 2006. All SEAT customers are currently being informed. Continued after sales service will be offered by a dedicated group of Volkswagen Dealerships in South Africa. These are the same Volkswagen Dealerships that currently service SEAT vehicles – 10 dealerships in total. All warranties, service plans and roadside assistance relevant to the SEAT Brand in South Africa will be honoured.


3. What about the impact on the customer’s investment in a
SEAT product?

Volkswagen of South Africa will offer all existing SEAT
customers a preferential deal on the purchase of a new Volkswagen.


4. Will there be any loss of jobs as a result of this decision?

There will be no significant loss of jobs, as it is the intention of Volkswagen of SA to absorb all the SEAT South Africa staff into their existing Sales and Marketing structure. In addition, the 10 SEAT Dealerships are all owned by existing Volkswagen Franchise owners. Every attempt will be made to absorb the SEAT sales staff into the existing Volkswagen Franchise structures.

5. How long will it take to liquidate all the existing new SEAT vehicle stock in South Africa?

It is our intention to cease new SEAT vehicle sales
operations in South Africa by the end of 2008. We anticipate
by this time to have sold all existing stock in the country.


6. What about after sales parts availability for SEAT?

This will not be a problem as Volkswagen of South Africa will
continue to import parts as per the SEAT customer promise
to take care of the SEAT customer for the lifespan of their
vehicle.


7. The SEAT Motorsport programme has been successful.

The Brand is currently leading the 2008 Production Car
Championship. What now?

The Privateer SEAT Racing Team of Graham Nathan and
Phillip Kekana will continue to race the two Leon Cupra’s and complete the 2008 Production Car Championships in
November 2008. SEAT will not participate in the local Production Car Championships after 2008.


8. The Johannesburg International Motor Show
opens its doors on Thursday, October 30th, we
believe SEAT will be exhibiting the Brand at the show.

Discussions are in progress with the show organisers to find
an amicable resolution to SEAT’s commitment to the
Johannesburg International Motor Show. Whilst SEAT will
not exhibit at the show, all obligations to the show organisers
will be met.


9. The decision to withdraw SEAT from South Africa comes at a
time when the Motor Industry Development Programme has
been reviewed. The review process has taken a lot
longer than originally anticipated. Has this process and the
outcome of the MIDP review got anything to do with the
decision to withdraw SEAT from South Africa?

The circumstances surrounding the Motor Industry
Development Programme and the outcome of the
current review process had absolutely nothing to do with
the decision to withdraw SEAT from the market in South
Africa. The decision to withdraw SEAT from South Africa
has been taken based on many circumstances – some of
which are unique to Volkswagen of South Africa and some
generic to current and anticipated future market
circumstances.


10. The parent Company of SEAT in Spain – have they been
supportive of the Brand in South Africa and do they support
the decision to withdraw SEAT from South Africa?

SEAT is a wholly owned subsidiary of the Volkswagen Group
with it’s headquarters in Spain. It is a Brand with a proud
heritage and an excellent track record in key European
markets – particularly Spain. SEAT of Spain have been
100% supportive since the Brand was launched in South
Africa in June 2006. SEAT of Spain have assisted
Volkswagen of South Africa and the SEAT Dealer network in
South Africa significantly in terms of expertise and required
resources. Regarding their support to the decision to
withdraw SEAT from South Africa, SEAT of Spain fully
understand the circumstances and resultant reasons to
withdraw the Brand from South Africa. SEAT of Spain have
been fully engaged in the process.

The SEAT Brand internationally has plans to exceed sales of
800.000 units in 2008. The launch earlier this year of the
new Ibiza has been extremely successful in key European
markets.


11. Why did SEAT South Africa not introduce the new Ibiza?

Had the decision been to continue selling the SEAT Brand in
South Africa, the new Ibiza would have been imported during
the latter part of 2008.


12. What is Volkswagen of South Africa’s future product strategy
in the volume segments in South Africa.?

Current Polo is surely near the end of its life cycle and we
believe that the Citi cannot continue for ever.

Whilst the current Polo is coming towards the end of its
product life cycle, it continues to dominate the A0 segment in
South Africa. It is the leading Brand in the A0 segment in
terms of sales volume. Polo continues to offer the private
buyer, our rental customers and our major fleet owners an
outstanding solution to compact motoring without
compromise in key areas such as safety, reliability, comfort ,
specification and driving enjoyment.

Volkswagen of South Africa will build the new Polo in its
factory in Uitenhage. The new Polo is likely to continue to
dominate the A0 segment and in addition, will present
Volkswagen of South Africa with outstanding export
potential. But this is still some way off.

Regarding Citi , when Citi does come to the end of
its illustrious innings, it will be replaced by a highly
competitive product in the entry level/affordable car
segments. This territory is historically Volkswagen’s strong
point in the South African market and it is the Company’s
intention to continue to offer the South Africa motorist
affordable, fun motoring. However, it is far too early to talk
specifics regarding a Citi replacement.


13. Volkswagen of South Africa is withdrawing SEAT at a time
when the domestic market is 22% down on the same period
2007. It is likely that the market will remain in its current
slump for some time to come. Was this a key reason to
withdraw SEAT?


No – the reason to withdraw SEAT is a far more strategic
one which has taken into account many other circumstances
beyond purely the cyclical downturn in South Africa. Volkswagen of South Africa remains highly optimistic about
the future of the manufacturing industry in South Africa and
the future of the domestic passenger and commercial vehicle
markets. It is our stated intention to continue to dominate the
passenger car market and at the same time, to widen our
Commercial Vehicle footprint in South Africa. In this regard,
there will be significant announcements in the not too distant
future.

[calypso]

So you wanna buy Seat's stand for cheap?

[Carn]

Feel really sorry for the guys who invested in the brand here in SA, resale values are gonna plummet !

[springbok]

Bad, bad, greedy marketing.

In Europe they sell Seat in the market segment below Golf. Here for some bizzare reason they tried to position Seat above Golfs (a kind of Uber Golf).

Didn't work. SA motorists didn't buy it (in more ways than one)

[Vampyre]

*Ouch*

seemed like a nice car .. was thinking of getting my self one some time ago ..good thing i didnt.

[MeTsU]

It's a real pity to hear. If you guys are keen to check out more of it, take a look at the thread on VWClub SA...

[freerider]

MeTsU Wrote:It's a real pity to hear. If you guys are keen to check out more of it, take a look at the thread on VWClub SA...

Shoot us a link dude

[MeTsU]

Sorry, DOH! I realised after posting I should've swung the link - H E R E