Volkswagen has relieved its Seat brand of responsibility for the development of the planned MEB small electric car for under 20,000 euros, insiders say. The decision is related to the fact that Seat has indefinitely postponed its market entry in China.
Initially, Seat was to develop the small electric cars based on the MEB platform together with JAC, Volkswagen’s China partner. The Chinese VW brand could now take over the development, but no decision has been made yet. The report from Autonews references a ‘source close to Seat’.
Volkswagen has been working on a low-cost MEB small car for some time – the last time we heard of it, there was talk of a premiere in 2023. “It is really difficult to achieve a reasonable range for a car under 20,000 Euros,” said VW boss Herbert Diess at the end of 2019, before adding that “there is still a long way to go”.
Wolfsburg had already placed the project in the hands of Seat in March 2019. “For the first time, the Seat Technical Centre will develop a vehicle group that can be used by several brands worldwide,” said Luca de Meo, as head of Seat at the time. According to his comments, Diess also saw Seat in a new role within the group. “This year’s successes underline Seat’s potential to take advantage of growth opportunities and open up new markets,” said Diess. “Seat will implement the first electric vehicle designed specifically for urban traffic.”
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Barely 14 months and a few strategic decisions later, the situation is different. As Automotive News writes, citing their Seat-related informant, managers in Wolfsburg believe that a development led by VW will be “more efficient in terms of synergies”. However, a VW spokesperson stated that no decision had yet been made as to which brand would assume responsibility for the entry electric vehicle on the MEB platform.
Responding to a media prompt, Seat confirmed that the brand would no longer manage the project. The decision, he said, “was taken as part of the Volkswagen Group’s revision of the global group’s strategy concerning brands, production systems and markets”.
The small electric vehicles will be based on a heavily modified version of the MEB, which will be shortened to a vehicle length of around four metres (i.e. roughly the size of a VW Polo). The challenge, however, is the cost, as this must be about a third less than for the ID.3 for such a small car model to become commercially successful.
Seat wanted to launch Volkswagen in China as a purely electric brand from 2021 with the help of JAC. The first electric Seat in China was still to be based on JAC technology, followed later by the MEB models. However, this decision has since been revised.
It remains to be seen how VW now intends to serve the market for small electric vehicles in China, which remains Seat’s target. It would be possible for the brand to take over Škoda. In contrast to Seat, Škoda is already active in China – albeit primarily with SUV models. Or even VW itself – if one excludes the Audi A1, which is now built by Seat, other group brands do not have any small cars on offer.