VW ousts CEO of loss-making Spanish Seat division

 

Germany's Volkswagen said on Monday it would replace the chief of its Spanish brand Seat, suggesting Europe's biggest car maker was growing impatient with its constantly loss-making division.

CEO James Muir, who hasn't achieved a profit since taking the helm of Seat in September 2009, will be replaced by VW group marketing chief Juergen Stackmann as of May 1, Wolfsburg-based VW said in a statement.

VW gave no reason for the move, merely saying that Muir had helped further Seat's restructuring and would assume a new role at group level. Spokesman Markus Schlesag declined to elaborate.

"VW will never make any money with Seat," said Ferdinand Dudenhoeffer, head of the Center for Automotive Research at the University of Duisburg-Essen. "It's a redundant brand and VW is growing unhappy with things, but swapping the CEO isn't going to make Seat any more healthy."

Battered by the slump in austerity-strapped Spain, where car registrations have been falling for years, Seat is the only one among VW's stable of five main passenger car brands to be stuck in the red, 2012 group results published on March 14 showed.

VW, which bought Seat in 1986 to increase its exposure to the then fast-growing Spanish market, has been trying for years to overcome losses caused by underutilised capacity at Seat's main factory in Martorell.

VW moved production of the Audi luxury division's Q3 compact SUV to the Spanish plant in 2011 to boost output.

Cost-cutting measures, a raft of new models and introduction of Seat vehicles to China did help to narrow the loss at Seat by almost a third last year to €156 million.

VW finance chief Hans Dieter Poetsch has said that Seat might return to profit this year. He backpedalled ever so slightly last month, though, when he told the Frankfurter Allgemeine Sonntagszeitung that it remains unclear whether Seat would return to the black in 2013.