By Joan Faus
BARCELONA (Reuters) - Volkswagen (ETR:VOWG_p)'s Spanish unit SEAT on Friday posted record first-half profit and sales, fuelled by its high-end Cupra brand, even as supply disruptions kept production 10% below goals, but expressed concern about demand in 2024.
It swung to a profit of 371 million euros ($413.07 million) from a year-ago loss of 97 million euros, while revenue rose 38% to 7.4 billion euros. Combined sales of SEAT and Cupra brands grew 28%, with the latter alone rising 57%.
"It's the quality of our business, of turnover and profitability that is driving our result up and not just pure volume," SEAT chief executive Wayne Griffiths told Reuters, saying the focus on more expensive cars and cost discipline was "really paying off".
He said he was confident SEAT would maintain first-half pace of growth in the full year, but acknowledged concern demand could falter next year amid geopolitical and economic uncertainties. Griffiths cited growing competition between the United States and China, rising interest rates, as well as high energy costs and inflation.
"Just with interest rate increases, that amount for most family households is what they would be basically spending on a car," he said at the Barcelona-based carmaker's flagship store. "Suddenly you become one of the things on the list that perhaps could be cut".
Volkswagen on Thursday lowered its 2023 deliveries outlook, citing uncertain economic times, but it aims to improve its cash flow as it hikes prices and cuts costs.
U.S. MARKET
Griffiths said semiconductor supplies had improved, but production was still affected by a shortage of mechanical parts and an increase in raw materials and transport costs.
He said Cupra, which targets young, urban costumers with modern sports-themed cars, was "still on an exponential growth path".
SEAT has sold over 400,000 Cupra cars since launching the brand in 2018 and aims to sell 500,000 annually in the medium term.
He said Cupra was "seriously looking" into entering the U.S. market, where SEAT is not present, but possibly by the end of the decade and under a very tailored approach, potentially with custom models manufactured at VW's North American plants.
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