Spainis the world's eighth-largest manufacturer of automobiles. Its car market stands among the largest in Europe.[6][7] 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.[8]
The lack of interest shown by the foreign firms in the weakened post-civil war Spanish market opened an opportunity for local interests.[9] SEAT dates its origins back to June 22, 1940, when the Spanish bank 'Banco Urquijo', with the support of a group of industrial companies, (Hispano-Suiza, Basconia, Duro-Felguera, S.E. de Construccin Naval, Euskalduna, S.E. de Construcciones Metlicas, FundicionesBolueta, Echevarra, etc.) founded the 'Sociedad Ibrica de Automviles 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 January 3, 1942.[10] 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.
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 Ibrica 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 Jos Ortiz-Echage Puertas, who came from the Spanish aircraft manufacturer Construcciones Aeronuticas SA, where he had held the position of CEO, and who in 1976 was named the Honorary lifetime president of SEAT.[12][13][14]
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.[18] 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.
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', 'Citron-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).[19] On December 6, 1967, SEAT also founded its own customer financing company 'Financiera SEAT, S.A.' (Fiseat).
To produce its own research projects independently, on November 16, 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.[20]
In 1973, SEAT and Citron-Hispania jointly contributed equal shares in founding the Vigo-located factory of Industrias Mecnicas 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 Citron-Hispania but also to Ford Espaa, was meant to be transferred later in 1986 to the multinational company GKN.[22]
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 Saragossa. 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.[23][24]
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.[25] 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.
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 Antoanzas, 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.
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