The story
Founded by Instituto Nacional de Industria on May 9, 1950.1
History
Establishment
Spain is the world's eighth-largest manufacturer of automobiles. Its car market stands among the largest in Europe. This, however, has not always been the case; in the first half of the 20th century, Spain's economy was relatively underdeveloped compared to most other Western European countries and had a limited automobile market. In this period, car production was limited, with only a few low-volume local manufacturers catering mainly to the luxury end of the market, of which Hispano-Suiza was the most successful. Spain's limited market for mass-produced vehicles was taken over by foreign companies operating through subsidiaries that either imported cars or assembled cars from imported parts, depriving the country of the technological know-how and large investments needed for mass production. The situation greatly deteriorated with the Spanish Civil War from 1936 to 1939. Car demand collapsed not only due to the greatly reduced purchasing power of Spaniards caused by war devastation but also because the multinational subsidiaries either ceased operations or were severely stricken by the war and its aftermath.
The lack of interest shown by the foreign firms in the weakened post-civil war Spanish market opened an opportunity for local interests. SEAT dates its origins back to 22 June 1940, when the Spanish bank 'Banco Urquijo', with the support of a group of industrial companies, (Hispano-Suiza, Basconia, Duro-Felguera, S.E. de Construcción Naval, Euskalduna, S.E. de Construcciones Metálicas, Fundiciones
Bolueta, Echevarría, etc.) founded the 'Sociedad Ibérica de Automóviles de Turismo' (S.I.A.T.) to establish Spain's own mass production car maker. The initial Banco Urquijo's project aimed at running the S.I.A.T. motor company as a fully private enterprise, but soon after 1941, the interventionist state holding company Instituto Nacional de Industria followed a decision taken by the Franco government on 3 January 1942. The goal for the new national car brand was not to be only another licensee car maker assembling foreign designs and parts in Spain, but of developing the whole manufacturing process from design to assembly within Spain. Because of the country's lack of expertise in automotive mass-production development, finding a foreign partner that would contribute technically and with its models in the early years in exchange for cash, shares, bonds, and royalties became the course of action. With the rest of Europe having entered World War II, and Spain itself in ruins from its civil war, the project was delayed but not abandoned due to its strategic importance.
SEAT under its current name was founded on 9 May 1950, under the denomination 'Sociedad Española de Automóviles de Turismo, S.A.' (S.E.A.T.) by the Instituto Nacional de Industria (INI) with a starting capital of 600 million pesetas – equivalent today of almost 3.6 million euros – in the form of 600,000 shares of 1000 pesetas each, and in a time when the country needed remodeling the fundamental structures in its national economy, just after the end of World War II. The birth of SEAT came almost a year and a half after the Spanish government and six Spanish banks ('Banco Urquijo', 'Banco Español de Crédito (Banesto)', 'Banco de Bilbao', 'Banco de Vizcaya', 'Banco Hispano-Americano', and 'Banco Central') had signed on 26 October 1948, an alliance contract with the Italian car manufacturer Fiat to form a partnership with a foreign ally to bring to life Spain's major car manufacturer. The favoured bidders were Germany's Volkswagen and Italy's Fiat. Fiat's bid won for several reasons, including Fiat's prominence in Spain and the fact that the company established the short-lived 'Fiat Hispania' plant in Guadalajara, which was destroyed in the Spanish Civil War. Fiat's collaboration with the French company Simca proved Fiat's ability to manage complex international projects. Fiat's experience in the semiprotected car market in Italy was seen as the most easily transferable to the one in Spain, both of which had, at the time, customers of low incomes and limited markets for cars, as well as similar road conditions. In Italy, Fiat dominated the market for vehicles under 12 horsepower, which would initially be the main market segment in Spain. The relative economic isolation of World War II damaged Italy and made Fiat interested in opportunities outside Italy, meaning that the negotiations with the Italian manufacturer could prosper more easily in favour of Spanish interests than those from other countries. In 1947, the Banco Urquijo group revived the S.I.A.T. project. In the next year, the talks ended successfully with the signing of a three-part contract, with the understanding that the INI would hold a 51% controlling interest, as well as a ruling act in the new company preserving a focused approach of the enterprise in the 'national interest'. The Banco Urquijo group, although a minority shareholder, looked forward to assuming a leading role in the future as soon as the company was privatized. Partner carmaker Fiat was offered a 7% share in exchange for its technical assistance. This way, SEAT would not only be able to reinitiate the country's economic recovery as the largest employer in the 1960s and '70s but would also contribute to the industrialisation of a largely rural economy.
Though initial thoughts were of locating in less-developed inland cities such as Valladolid and Burgos, the company decided the plant would be constructed in the duty-free zone area of the Port of Barcelona (Barcelona Zona Franca), which would offer better access to the Mediterranean shipping and the rest of Europe through rail and road connections across the nearby French border. Barcelona was, after all, a city with an industrial history that had built up expertise in complex industrial enterprises since the latter part of the 19th century; it was also the host location of many early historical Spanish carmakers, such as Hispano-Suiza and Elizalde, and subsidiaries of foreign carmakers, such as Ford Motor Ibérica and General Motors Peninsular. Being an enterprise of vital interest for the national economy and an investment opportunity for Fiat's expansion plans through the Iberian peninsula, SEAT benefitted from state tariff and tax exemptions and technical assistance from its foreign partner Fiat. The company's first president was the industrial and aeronautical engineer, pilot, and photographer José Ortiz-Echagüe Puertas, who came from the Spanish aircraft manufacturer Construcciones Aeronáuticas SA, where he had held the position of CEO, and who in 1976 was named the Honorary lifetime president of SEAT.
Partnership with Fiat
The construction works for SEAT's Zona Franca plant began in 1950, and the opening day came three years later on 5 June 1953, while in the meantime since 1951, the Spanish marque was starting preparations for setting up almost from scratch an entire supplier industry background. The first car in the marque's history to be produced was a SEAT 1400 model that came off the production line on 13 November 1953, with license plate B-87.223. In the following few months, the plant's production output and workforce significantly increased together with the implementation of locally made components in the production process to limit imports from one part and from another part to push the development of the almost nonexistent Spanish supplier industry and meet SEAT's assigned key role as the national carmaker in restoring the Spanish economy of post–World War II Spain. By 1954, the use of Spanish-made parts had risen to 93% of the total, and the factory was officially opened the next year on 5 May 1955. Nevertheless, the impact on Spanish society could not be seen immediately since the first model launched by SEAT was considered a luxury car, so it was highly priced and still not affordable to the average Spanish consumer. Consequently, SEAT needed a second, more economical model to compete against simpler, inexpensive designs that appeared in the local market, like the Biscúter, which seemed to suit better the unwealthy customers looking for a personal means of transport in a suffering economy.
Until the time SEAT had the technical maturity and expertise to present its first self-developed model, the SEAT 1200 Sport in 1975, in its beginnings, the company had to manufacture either rebadged or restyled models borrowed from the range of its Italian partner Fiat Automobiles or even redeveloped them according to the needs of its range. However, the first example of a SEAT-exclusive derivative would arrive in September 1963 with the launch of the SEAT 800, a car developed in-house by SEAT with no equivalent model in Fiat's range based on the SEAT 600 as a stretched version with four doors.
In 1957 SEAT founded the SEAT Training Centre in the greater Zona Franca plant area, an institution covering the training of qualified personnel and serving the needs of the automobile industry in specialized technical human resources. In that same year, the historical SEAT 600 was launched, which proved to be the crucial car that literally motorized Spain, being the first car for many Spanish families and becoming a symbol of the Spanish miracle.
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As the annual production growth was hitting one record after another due to the heavy demand, the economies of scale permitted cutting costs and prices, subsequently renewing demand and boosting sales together with profits for SEAT. On 29 June 1964, the brand opened its new headquarters in Madrid, which hosted the firm's sole – up to 1972 – general administration offices. SEAT's plant manager was only in Barcelona until 1973 when SEAT settled another general director in Catalonia.
In 1967, 14 years after producing cars for the domestic market, SEAT's success was signalled by its dominant position in Spain, ahead of its major competitors, i.e. 'FASA-Renault', 'Citroën-Hispania', Authi, and Barreiros, making SEAT Spain's largest automaker in sales numbers and a wholly localized production. In that year, an agreement between Fiat and the Spanish Ministry of Industry was reached to end the restrictions over exporting SEAT cars from Spain, a term of the original licensee contract agreed with Fiat in 1948. In exchange for that, Fiat would increase its holding in the company from 7% to 36%. At the same time, the share held by the government holding agency would be reduced from a controlling 51% to 32%. The six major Spanish banks took the remaining 32%, which decreased from their previous 42% share split equally into 7% parts owned by every single one. Although not a majority owner, Fiat now was seen to control the business: the deal also included various undertakings by Fiat to help in the growth of SEAT, and with the development of a new model (possibly the SEAT 133). On 6 December 1967, SEAT also founded its own customer financing company 'Financiera SEAT, S.A.' (Fiseat).
To produce its own research projects independently, on 16 November 1970, SEAT came in accordance with Fiat to start building separate infrastructures aimed at developing new technologies. In 1972, the brand arranged some provisional facilities for the site of the future technical centre in Martorell, and in 1973, it began construction work; this goal would come only until 1975 to be reached with the completion of the first phase in the construction of a facility designed by the Catalan architect Josep Antoni Coderch.
During the same period, the manufacturer continued to dominate the Spanish auto market, producing 282,698 cars – more than 58% of the Spanish production total – in 1971, despite the disruption that year caused by strikes and a serious flood at the coastally sited Barcelona plant. However, with just 81 cars per 1000 people, Spanish car sales were seen as ripe for further growth, and SEAT faced the prospect of increased competition with other major manufacturers contemplating the establishment or expansion of local production facilities in the still heavily protected Spanish car market.
In 1973, SEAT and Citroën-Hispania jointly contributed equal shares in founding the Vigo-located factory of Industrias Mecánicas de Galicia, SA (Indugasa) producing constant-velocity joints, essential components used in front-wheel drive cars, i.e. in a transmission layout the use of which was becoming more and more common at the time. This plant, which in the next years would supply parts not only to SEAT and Citroën-Hispania but also to Ford España, was meant to be transferred later in 1986 to the multinational company GKN.
In May 1975, after a request from the Spanish state authorities to ensure the rescue of the jobs for the workers in the Authi-owned factories, SEAT moved on talks with the parent company British Leyland Motor Corporation (BLMC) of the bankrupt Authi to take over the brand's operations in Spain, leaving aside GM's interest in it, which would otherwise open the path for the American automaker to enter the Spanish market, thus jeopardizing the relationship with Fiat. The talks ended in July 1975, when an agreement was announced between the two parties under which SEAT would acquire from BLMC the Authi brand along with its assets for 1,250 million pesetas. The imposed acquisition of the Landaben plant would also give up SEAT's plans to build a new facility in Zaragoza. Although the Authi supplier factory in Manresa was transferred to a company called Cometsa for 150 million pesetas, the Landaben plant in Pamplona remained under SEAT's ownership to continue production in February 1976 only of SEAT cars this time.
The 1970s were a decade of rising prosperity in Spain, which is reflected in the announcement in August 1976 that SEAT would commence local production of the Lancia Beta. Three years later, Beta production by SEAT indeed commenced at the company's recently acquired Pamplona plant, though only the coupe and HPE lift-back versions were included. The Spanish cars were fitted with a simplified suspension system and smaller engines than their Italian counterparts to qualify for a lower car tax rate.
In 1977, SEAT's leasing company Liseat was founded. In 1979, the Gearbox del Prat facility was set up as a specialised plant for producing gearboxes, gear mechanisms, and differentials in El Prat del Llobregat near Barcelona.
Dispute with Fiat
In the early 1980s, extensive discussions concerning funding and control took place between SEAT's major shareholder, the Spanish government, and Fiat Automobiles; SEAT needed major capital investment, which Fiat was not prepared to contribute, partially due to the oil crisis of the 1970s and also due to the uncertainty for Fiat's interests following the end of a protectionist policy against GM in Spain. The outcome, in 1982, was an end to the relationship with Fiat after nearly 30 years, a rather surprising decision despite the favourable perspectives for the Spanish economy, with Spain being in the anteroom of the European Economic Community since 1977.
The end of the cooperation with the Italian firm was marked by a change in SEAT's logo in 1982, and the first car under the new SEAT logo without Fiat's involvement appeared in the same year, the SEAT Ronda, styled by Rayton Fissore in collaboration with the technical centre in Martorell. The launch of this model sparked a lawsuit from Fiat against SEAT, as the former claimed the car was too similar to a car in Fiat's range, the Ritmo. In defence of SEAT, the then-president of SEAT, Juan Miguel Antoñanzas, showed a Ronda to the press with all the parts different from the Fiat Ritmo painted in bright yellow to highlight the differences. The case was eventually taken to the Arbitration Chamber of Paris, which in 1983 declared that differences between both cars were important enough not to consider the Ronda as a rebadged Ritmo, ending the dispute in favour of SEAT. Rumour at the time had it that Fiat was angry because the Ronda restyling was, in fact, too close to their own planned restyling for the Fiat Ritmo, which they had to scrap.
Volkswagen Group subsidiary
In 1982, Carl Hahn, who had just assumed responsibility as the chairman of the Volkswagenwerk AG (Volkswagen Group), examined the opportunity of approaching SEAT after Fiat's withdrawal in his plan to expand the Volkswagen Group's operations out of Germany and turning the German group into a global force. It also followed the precedent set by other global manufacturers (such as Ford in Valencia and General Motors in Zaragoza) in setting up manufacturing operations in Spain. However, the Spanish authorities had already started talks with other foreign firms, such as Toyota, Nissan and Mitsubishi to choose a strong partner for SEAT. Hahn's interest soon resulted in industrial and commercial cooperation, as well as a license agreement with SEAT on 30 September 1982, for the production in Spain of the Volkswagen Passat-Santana and Polo-Derby models in SEAT's Zona Franca and Landaben factories, respectively – having thus as an effect on 29 April 1983, the ending of the SEAT Panda's production at the Landaben assembly lines due to the need of adapting this plant to the production of the VW Polo – and eventually a partnership agreement was signed on 16 June 1983, between the two parties being represented by the president of SEAT Juan Miguel Antoñanzas and Carl Hahn on behalf of the Volkswagenwerk AG. SEAT also gained the rights to distribute Volkswagens in Spain.
SEAT launched its new Ibiza, a Giugiaro-styled hatchback, which made use of System Porsche engines and also featured underpinnings from the Fiat Ritmo/Strada, in 1984. It also formed the basis of the Málaga, a four-door family saloon. SEAT began expanding into markets beyond Spain's borders, including the United Kingdom, where it began selling cars in the autumn of 1985.
On 17 June 1986, after purchasing the 51% majority stake of SEAT and its share increased to 75% on 23 December of the same year, the Volkswagen Group became the major shareholder of SEAT. On 18 December 1990, the Volkswagen Group bought the remaining 25% of the company, thus making SEAT the first non-German wholly-owned subsidiary of the group. Fulfilling Hahn's expectations, SEAT not only made a profit two years after Volkswagen bought a majority of its stock but also provided a low-cost manufacturing outlet for other VW models, contributing up to 15.2% of the VW group's total output in 1989, as well as an opportunity to enter the relatively unexploited (at that time) Spanish market under the SEAT, VW, and Audi names.
The gathering of the brand's main infrastructures in the greater Martorell plant area has taken place in a long process beginning back in 1975 with the opening of the SEAT technical centre, but only in 1989 was a decision made to start building a new main assembly facility next to the technical centre in Martorell, replacing the old one in Zona Franca. In that same year, the translocation of SEAT's Madrid administration offices to Barcelona began with the sale of two of the brand's assets in La Castellana to be completed in 1991 with the definitive installation of SEAT's headquarters in the Catalonia region.
The centralisation of the management, design, research and production facilities localised around the plant site was meant to serve the aim of optimising the development of new models. On 22 February 1993, King Juan Carlos of Spain and the newly elected chairman of the Volkswagen Group Ferdinand Piëch inaugurated the Martorell plant, one of the most modern and efficient car plants in Europe, using the just-in-time process with its suppliers' site located only 2.5 km away. The first cars that rolled out of the Martorell plant lines were the SEAT Ibiza Mk2 and its saloon version, the SEAT Córdoba Mk1. The new Ibiza was a huge success for SEAT, greatly expanding its market share, particularly in export markets.
Logo history
Notes
From Wikipedia’s article on SEAT, shared under CC BY-SA 4.0.5