Seat is plotting a major rebranding exercise to reposition itself further up the premium market, in search of better sales and profits, Autocar reports. The move is part of parent company Volkswagen’s decision to revamp the Spanish automaker’s image as a more emotional premium brand, much like the Fiat Chrysler Automobiles’ Alfa Romeo.

Nothing is official yet, but VW boss Herbert Diess did hint of the plan to have Cupra (Seat’s offshoot performance brand) be the new face for Seat, while Skoda will continue serving the budget-oriented market. The move will also enable Cupra to move into new global markets such as North America by 2025.

Diess told the publication that Seat’s best chance for long-term survival is to be positioned above Volkswagen. Currently, Seat’s operating costs are high, especially for key models like the Ibiza, Leon, and Ateca. Diess also said the cost basis for these cars is almost equal to their Volkswagen counterparts, despite the Seat models being cheaper.

While Diess gives full credit to Seat boss Luca de Meo in boosting sales to over 500,000 units in 2018, he raised concerns regarding poor sales performance in Italy and France, two European markets which are deemed crucial. That alone is a good enough reason to rethink Seat’s future direction, said Diess.

Luca de Meo, who is the boss for Seat and Cupra, has already gone on record about the issue that plagues Seat. Speaking at the Cupra launch last year, he said: “Seat has put a focus on growing and gaining credibility, but in some markets there is still some rejection of the Seat brand from people who are image sensitive.”

“This we can fix, but we need time. Cupra is starting from scratch with something new. We start from a green field, and maybe with that we can attract customers who in other cases might not buy a Seat. Selling those kinds of cars for us is much more profitable. This allows us to increase the conquest of the brand.”

Starting next year, Cupra will relocate to a larger 2,400 sq metre headquarters. Staff employment has gone up by 50%, and this year alone the brand has sold over 18,000 cars, which is nearly 80% more than in 2018. Just two Cupra models are on sale, which are the Ateca and Leon.

Cupra is also looking to introduce its first electric vehicle based on the Tavascan concept. Company design boss Alejandro Mesonero-Romanos said: “I made a deal with Luca that this car would be very close to a production version,” although he also admitted that the project has yet to receive the green light.