There seems to be no end to Volkswagen's financial woes. After recently announcing they plan to cut 50,000 jobs and shutter several plants amid a major restructuring, it looks like Volkswagen plans to take more cost-cutting measures as it navigates a financial storm.

Now, the embattled automaker appears to be planning more drastic measures to save on costs. Recently, German publication WirtschaftsWoche (AKA Wiwo) reported that it received a confidential document wherein Volkswagen plans to ax the 76-year old Spanish car brand Seat by 2029 and concentrate its efforts on Cupra, which is Seat's performance brand. The report added that Seat has already been removed from Volkswagen's long-term plans and is set to be phased out over the next three years.

If true, then it would be quite the exit for the Spanish car brand, which was first launched in 1950 and became part of the Volkswagen Auto Group in the 1980s. However, Volkswagen and Seat S.A. (the corporate entity that manages the Seat brand) released a press statement to set the record straight.

According to Volkswagen, the Seat brand remains an important part of Seat S.A. and has a clear product lineup for the coming years. In fact, Seat will continue with its launches and product updates, including mild-hybrid versions of certain models for 2027. However, the brand also said that beyond the current product cycle, the future direction of the Seat brand remains under assessment.

With stricter emission regulations, the high investments required to develop new-generation models with electrified powertrains, and weakening sales, the business case for the Seat brand is becoming more challenging. Depending on several scenarios beyond 2030, including regulations, customer demand, and market conditions, a gradual phase-out of the Seat brand is possible, although no final decision has been reached yet.

The Volkswagen Group wishes to reiterate, however, that while the Seat brand could be phased out, Seat S.A. has a solid future, and the auto group plans to strengthen the company further.

“Seat S.A. has an important role to play in the future of the Volkswagen Group. The company has demonstrated its ability to transform, with a strong industrial base in Martorell and the remarkable development of Cupra. I am proud of what the Seat and Cupra team has achieved over the past few years, and it gives me great confidence in what lies ahead. We are committed to building on these strengths and creating the conditions for SEAT S.A. and Cuprato continue growing and contributing to the success of the Group. At the same time, we need to remain flexible and adapt our brand and product strategies to regulation, market conditions and what our customers demand,” said Oliver Blume, CEO of Volkswagen AG.

Cupra first started life as Seat's performance badge before being spun off as a standalone brand that focuses on high-performance vehicles, as well as hybrids and EVs. From the Raval to the Born EVs, as well as the Leon and Formentor models, Cupra was able to carve out a key portion of the European market with its stylish and performance-oriented models.

With Cupra experiencing a surge in sales and becoming one of the fastest-growing brands in Europe, Volkswagen wants to unleash the full potential of Cupra with a larger product portfolio and further international expansion. And with Cupra having the ability to build hybrid, electric, and combustion vehicles, it gives the Cupra brand the flexibility to respond to different market trends and customer demand.

“Seat S.A. is entering a new chapter from a position of strength. We are becoming an automotive powerhouse, with a growing industrial role within the Volkswagen Group and CUPRA reaching its full potential. This is a story of transformation, with CUPRA as a key driver of our future growth and profitability. At the same time, our industrial responsibilities are growing and, with them, employment. We are building a strong future for SEAT S.A. and for Martorell,” shared Markus Haupt, CEO of Seat and Cupra.

Collectively, Seat and Cupra sold a combined 586,300 vehicles in 2025, which is a new record for the brand. However, Cupra sales soared 33%, while Seat sales went down 17%. Now, Volkswagen wants the Cupra brand alone to shift between 500,000 and 600,000 vehicles annually.

In the future, Cupra may also end up inheriting Seat's products, facilities, sales operations, and even production infrastructure. But that's before Volkswagen decides what will happen to the Seat brand in the coming years.