The historic restructuring of Volkswagen appears set to spell the end of the troubled Spanish brand Seat, potentially making it the first major traditional carmaker to fall victim to the rise of Chinese automakers, as experts predict a sweeping industry consolidation. Seat would be the first long-standing automotive brand to disappear since the early 2010s, when Ford discontinued Mercury, General Motors abandoned Saturn and Pontiac, and Saab went bankrupt. Such closures are rare in an industry where famous car brands can survive for decades.
Oliver Blume targets weaker brands
This prospect highlights CEO Oliver Blume's intention to streamline the massive German automotive group, focusing its investments on its strongest brands. The Volkswagen restructuring, which includes extensive job cuts, follows a steep decline in the group's sales in China as domestic manufacturers gained ground, adding even greater pressure from the industry's costly transition to electric vehicles. As part of the restructuring announced earlier this month, Europe's largest automaker stated that the future of Seat "beyond the current product cycle is still being evaluated," adding that "various scenarios remain possible after 2030." A source involved in the discussions told Reuters that Seat's rapidly growing sister brand, Cupra, which is turning toward electrification, will receive all future products as Seat's internal combustion models are gradually phased out. "We do not want to maintain two brand names," the source said, speaking on condition of anonymity because the discussions are confidential.
From dictatorship to the Volkswagen empire
Seat was founded in 1950 as a state-owned enterprise during the dictatorship in Spain, and was acquired by Volkswagen in 1986 as a low-cost brand for its growing automotive empire. However, Seat has not launched a new model since 2020, a particularly long absence in an industry where new product launches are critical for survival. The Barcelona-based brand represented less than 3% of Volkswagen's global vehicle deliveries in 2025. At the same time, sister sports brand Cupra, launched in 2018, surpassed Seat in annual car sales for the first time last year.
Cupra moves toward electrification – Seat lags behind
Cupra offers three fully electric models, including the new Raval, which Seat-Cupra CEO Markus Haupt described in May as a "game changer." Seat, by contrast, does not offer any electric vehicle models, and none are planned. Company executives have repeatedly stated that the brand cannot justify the necessary investment for an EV program because it is not profitable. The head of the Seat union, Matias Carnero, fears the fallout for jobs. "If the brand disappears because it does not transition to electrification... we have a serious problem," he said. "The warning signs were there," said independent automotive analyst Matthias Schmidt. "It was obvious that Volkswagen is not willing to continue with Seat." Analysts say Volkswagen's dilemma is increasingly repeating itself across the entire sector.
"Natural selection" in a shrinking industry
While growing automakers can invest in new products, technologies, and brands, companies with declining sales are often forced to make tough choices. Data from Felipe Munoz of Car Industry Analysis show that cumulative annual sales of European, US, Japanese, and South Korean automakers dropped by 12.6 million vehicles, or 17%, between 2019 and 2025, accelerating industry consolidation.
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