AutoBeta(AutoBeta.net)04/27 Report--

Seat, a subsidiary of Volkswagen Group, will return to the Chinese market and be electrified. It has been confirmed that it will be introduced by Jianghuai Volkswagen JV, and the two sides have signed relevant agreements in 2018 and 2019 respectively. However, due to changes in the business environment and strategic adjustment, the Seattle brand's plan to enter the Chinese market has been postponed.

According to foreign media reports, Carsten Isensee, Seattle's chief financial officer and interim chief executive, announced the change to return to the Chinese market at the brand's annual press conference earlier. A spokesman for the brand said that after careful consideration within Seattle, it has decided to suspend entry into the Chinese market and keep an eye on the trends and changes in this market. The company believes that the size of China's new car market has continued to shrink in the past two years, especially in the field of small cars, coupled with the current novel coronavirus epidemic, so it decided to postpone Seattle's return to the Chinese market.

It means that Seattle may postpone its return to the Chinese market indefinitely.

Sales of new energy vehicles in China fell for the first time in 2019 with a sharp reduction in subsidies. Sales of new energy vehicles in China totaled 114000 in the first quarter of this year, down 56.4 percent from the same period last year. The domestic new energy vehicle market has fallen for nine months in a row, and terminal sales of new energy vehicles have encountered bottlenecks. The Seattle brand, which enters the Chinese market with electrification, will encounter greater market challenges.

Seat, the largest car company in Spain, was founded in Barcelona in 1950 and is now a subsidiary of the German Volkswagen Group. In March 2012, Seattle brand cars officially entered the Chinese market, imported from Europe and sold in China, launching Leon, Ibiza and other models, but had no choice but to withdraw from the Chinese market at the beginning of 2014 due to low sales. According to the data, Siat sold only 2200 vehicles in China in 2012 and only 1100 in 2013. The failure of the brand to gain consumer recognition further worsened the market situation and accelerated the withdrawal of Seattle. It has also become the most short-lived foreign brand in the Chinese market.

The rise of new energy vehicles in China, coupled with Volkswagen Group's eyes on the development path of new energy vehicles in the future, make it possible for Seattle to return to the Chinese market. This time, Seattle will be transformed into a brand focused on pure electric vehicles.

In July 2018, Volkswagen Group (China) signed a memorandum of understanding with JAC and Seattle, the core of which includes that the Seattle brand will enter the joint venture system by taking a stake in JAC Volkswagen.

On November 30, 2018, Jianghuai signed a memorandum of understanding with Volkswagen Group (China) and Seattle. According to the agreement, the partners will jointly develop a global market-oriented electric vehicle platform for the production of Jianghuai Volkswagen models based on their respective technical strength and product reserves. Jianghuai Volkswagen will introduce the Seattle brand before 2021 and jointly carry out electric development. Construction of the Jianghuai Volkswagen R & D Center, which will focus on core areas such as car networking, self-driving and other future-oriented strategies, will begin by the end of 2018.

In May 2019, Seattle's plan to enter the Chinese market was officially confirmed. JAC signed an agreement with Volkswagen Group and Seattle at its headquarters in Seattle. The agreement confirms the further promotion of the strategic layout of Seattle China and makes it clear that the Seattle brand will be introduced to China in the next two to three years.

On the other hand, according to China's policy of abolishing the restriction on foreign equity ratio of passenger cars in 2022 and abolishing the policy of no more than two joint ventures, in view of the current market situation of Jianghuai Volkswagen and the postponement of Seattle brand entry into China, Volkswagen may have more joint venture models in terms of strategy in China.

Seattle, which quietly withdrew, will re-enter the Chinese market in the form of domestic electric cars, but the changes in the market environment make Seattle's road to China "hesitant". China's automobile market has entered the stage of stock competition, and many foreign brands have chosen to withdraw. Perhaps it is too late for the Seattle brand to return to China at this stage.

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