Seat increased purchases from suppliers by 5.6% in 2018

Apr 17, 2019   OEM

In a record year for Seat, the Purchases area managed a volume of €7.137 billion ($8.065 billion) in 2018, which represents a 5.6% increase compared to the previous year.

79% of all purchases were production materials, spare parts and accessories for the models that were made at the Martorell plant (Seat Ibiza, Arona and Leon; Audi Q3 and A1), and the remaining 21% was allocated to general goods and services. Over 60% of the total purchase volume was made to Spanish suppliers.


In 2018, the Purchases area contributed to cost optimisation which, in addition to an increase in sales and the commercialising of vehicles with a higher contribution margin, enabled Seat to post a record profit after tax of €294 million ($332.22 million), which was 4.6% more than in 2017. In the past five years, the volume of purchases managed by Seat has gone up by 23.2%, from €5.791 billion ($6.544 billion) in 2014 to €7.137 billion ($8.065 billion) last year.


“Quality, efficiency and cost optimisation are key factors for achieving objectives in the Purchases area. This is done by maintaining a relationship of collaboration and trust with our supplier network, which enables us to promote strategic projects such as general procurement management In the Iberian Peninsula and the development of North Africa”, explained Seat Vice-president for Purchases Klaus Ziegler.


Among the most prominent projects of 2018, the Purchases department contributed to the launch of the Seat Tarraco, which is manufactured in the Wolfsburg plant in Germany. Seat led the project and managed the choice of suppliers, preproduction tests and parts control.


In the same year, Seat also set out the progressive reduction in the total cost per vehicle by establishing a production model that is more efficient and sustainable. To make this happen, a multidisciplinary work team launched the Full Cost Optimisation (FCO) project, which is participated by the areas of R&D, Production, Finance and Purchases. Last year saw the implementation of suggested improvements that brought a savings of €141 million ($156.933 million) in 2018.


Seat's ambitious globalisation strategy, which includes projects such as taking a leadership role in North Africa and the assembly plant in Algeria, has extended the responsibilities of the Purchases area. Since 2018, Seat has a new team that manages supplier relations in the region, and in the past year has made contact with potential local and international suppliers who are interested in manufacturing parts in Algeria.


Furthermore, Morocco has a highly developed automotive sector that offers new opportunities for collaboration with locally established suppliers, which has resulted in new project assignments.


Moreover, since 2017 Seat has managed the coordination of the Volkswagen Group’s general purchases activities in the Iberian Peninsula for all procurements that are not directly related with vehicles in order to identify synergies and contribute to cost optimisation. The total volume of general purchases managed by Seat in the Iberian Peninsula in 2018 amounted to nearly €2 billion ($2.26 billion).


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