Domestic market sales by at Volkswagen’s Spanish unit Seat unit are set to drop over 22% this year and at a similar rate in 2009 as the car market fails to recover, its top executive has said.
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“I don’t think the Spanish market will recover, given everything that’s happening,” Seat president Erich Schmitt told the country’s Expansion newspaper, according to Reuters.
The report added the automaker (established decades ago as a Fiat assembler) planned to lay off around 750 workers between November and July 2009 due to falling sales as Spain heads towards recession. But Schmitt reportedly said Volkswagen had no plans to sell or close the unit. Rivals Ford and General Motors have also made Spanish production cuts, Reuters noted.
Schmitt told the newspaper Spanish salary accords, which index wages to inflation, had cut the competitiveness of Seat’s plants. The unit had to cut wage costs to protect jobs, just as VW’s premium model unit Audi had done.
“We have to reach another type of solution in Spain,” he told Expansion.
New car sales in Spain have fallen sharply this year – off 32% in September alone – the fifth straight month of decline, the news agency added.
The European automakers association ACEA has not yet published its September data but its August report showed Spanish sales down 41.3% to 58,530 units and off 21.1% to 882,397 for the first eight months of this year.
