Volkswagen Reportedly Considers Phasing Out SEAT Brand by 2029

Volkswagen Group is reportedly considering a gradual phase-out of its SEAT brand by 2029 as part of a significant cost-cutting plan. The plan is slated for review by the company's supervisory board. Under the proposal, SEAT would continue to operate but focus resources on its sportier, more profitable Cupra brand.

Data from the first half of 2026 shows Cupra selling 170,000 vehicles, compared to SEAT's 120,000. In 2025, Cupra sales surged 32.5% to a record 329,000 units, while SEAT sales declined 17% to 257,000 units. Cupra models, which often share production lines and platforms with SEAT models, are positioned as sportier and command higher prices.

Volkswagen has not denied the report. The Cupra brand was initially established in the late 1990s to improve SEAT's profitability during a period of decline. While Skoda has successfully surpassed one million annual car sales and become profitable, SEAT's sales dropped below half a million annually, struggling to generate profit.

Currently, most Cupra models are distinct from SEAT's, including the Formentor, the Audi Q3-based Taram, the Chinese-produced Tavascan, and the new electric Raval. This is not the first time Volkswagen has considered such a move; a similar plan was announced three years ago but was ultimately canceled, with Volkswagen reaffirming SEAT's continuation as a vehicle brand.

SEAT, founded in 1950 as Spain's national car manufacturer, initially produced Fiat models under license before introducing its own designs in 1984. Volkswagen acquired the company in 1988. In Israel, SEAT has seen a 48% decrease in sales this year, delivering 2,750 cars, while Cupra sales fell a less severe 17%, with 1,260 units sold. The cheapest SEAT model starts at approximately $33,000, while the cheapest Cupra starts around $51,000.

This strategic shift would represent Volkswagen's move away from lower-margin, mass-market segments, which are increasingly facing competition from Chinese manufacturers in Europe, towards a more profitable, younger luxury brand.