Is SEAT disappearing? What Volkswagen's plans could mean for Spain

Volkswagen is considering the future of the SEAT brand as Cupra grows, electric cars reshape the industry and Chinese manufacturers make a bigger push into Spain

SEAT has been part of everyday life in Spain for more than 75 years, with cars such as the Ibiza, León and Arona a familiar sight on roads across the country. So reports that Volkswagen could eventually phase out the SEAT brand have understandably raised questions about what is actually going on.

The short answer is that SEAT is not closing and the brand has not been officially scrapped. But Volkswagen is looking closely at whether it makes sense to continue investing in SEAT beyond the current generation of models, with Cupra increasingly taking centre stage. And the decision could have implications well beyond the cars themselves.

Why is SEAT's future suddenly in question?

The story broke recently after reports in Germany suggested Volkswagen was considering ending investment in the SEAT brand from around 2029. Volkswagen did not confirm that SEAT would disappear. Instead, it said the future of the brand was still being assessed, pointing to the cost of electrification, increasingly strict European emissions rules and the investment needed to develop a new generation of electric SEAT models.

SEAT itself has also stressed that no final decision has been made. The important thing here is that this is about the SEAT car brand, not the company SEAT S.A. disappearing altogether. SEAT S.A. also owns and operates the Cupra brand and has a major industrial operation in Spain.

Why is Cupra so important?

Cupra was launched as a separate brand from SEAT in 2018 and has grown considerably since then. In 2025, Cupra sold around 328,800 vehicles worldwide, compared with around 257,400 SEAT vehicles. Cupra is also the brand receiving much of the group's investment in new electric models.

That leaves Volkswagen with a fairly obvious question: if Cupra is growing and offers stronger profit margins, does it make financial sense to spend billions developing another range of new electric SEAT models as well?

For the moment, SEAT still has a product roadmap. Mild-hybrid versions of the Ibiza and Arona are planned for 2027, while the current León range is also being updated. What happens after that is much less certain.

What does this mean for the Martorell factory?

This is probably more important for Spain than the name on the front of the car. The Martorell factory near Barcelona is a huge industrial operation, employing thousands of people directly and supporting a much larger network of suppliers. It is not being closed. In fact, Martorell has already been transformed to produce electric vehicles. The Cupra Raval and Volkswagen ID. Polo have started production there, following billions of euros of investment in electrification. The big question is what comes next.

SEAT and its unions are pushing Volkswagen to award Martorell a second large electric platform, which could give the factory another important line of work once some of the existing SEAT models reach the end of their production lives.

There is another side to this story, though. On October 6, SEAT announced that another 425 temporary workers will become permanent employees from December, taking the number of workers made permanent during 2026 to 975. So this is not a case of the factory winding down.

And what about the Chinese connection?

This is one of the more surprising parts of the story. There is no confirmed Chinese takeover of SEAT. However, Spanish press reported recently that former SEAT boss Wayne Griffiths had previously held talks with a Chinese manufacturer about potentially taking over some production at Martorell. Those discussions did not lead to an agreement. But the idea has become more interesting as Chinese carmakers have expanded rapidly in Europe.

Cataluña's automotive industry is now openly looking at partnerships with Chinese manufacturers as one way of dealing with the changing car market. So while a Chinese company buying SEAT is not currently a confirmed plan, Chinese involvement in Spain's car industry is very real and could become part of the future of factories such as Martorell.

What does it mean for people who already own a SEAT?

For existing SEAT owners, there is no reason to panic. Even if Volkswagen eventually decides to stop producing cars under the SEAT name, that would not mean existing Ibiza, León or Arona models suddenly become unsupported. Cars already on the road would continue to be serviced and repaired, with parts and after-sales support continuing for years. The bigger question is what happens to the next generation of SEAT cars.

SEAT has also been exploring ways to make greater use of Martorell. Talks with Indra about producing around 5,000 light military vehicles at the factory have now been paused because of doubts about the project's viability, although the technical teams remain in contact and the possibility of reviving the agreement has not been completely ruled out.

For now, then, SEAT is very much still here. There are new cars being produced, workers are being made permanent and Martorell is building electric vehicles for Volkswagen and Cupra. But Volkswagen is also deciding what role the SEAT name should have in the next chapter of its business.

The answer could eventually see SEAT continue, become much smaller or gradually disappear while Cupra takes its place. For a brand that has been part of Spanish life since 1950, it is a pretty big question, and one that has not been answered yet.

Images: CC/SEAT