Volkswagen has given its loss-making Seat subsidiary an ultimatum: five years to turn itself around or VW will pull the plug on the Spanish brand.
Seat lost £95.6m in the first quarter of 2010. Now, in the year the comapny celebrates its 60th birthday, Seat has been given just five years of fresh products to help stop the haemorrhaging of cash.
"This is the last attempt for Seat as a brand, it would not be sensible to view things differently," Seat's CEO, James Muir, told Bloomberg. "If one would want to get rid of Seat, one would have to give the other party money to take it."
Muir - whose previous role was as boss of Mazda Europe - plans to help save Seat by expanding the brand's range. Crucially, he also wants to focus on the growth of the brand outside its domestic Spanish market.
The second part of Muir's turnaround scheme - becoming less reliant on the Spanish market - could prove to be vitally important, especially as Spain is in serious danger of falling prey to the same financial crisis currently crippling Greece.
"It will be difficult to turn Seat around," an analyst from M.M. Warburg in Hamburg told Bloomberg. "Most of their sales stem from southern Europe where the crisis has hit small-car makers particularly hard."
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