Seat gains stability with suppliers closer to home

Vehicle manufacturers in Europe have been responding to supply chain disruption in recent years by bringing parts supply closer to home. Rather than optimising cost by resort to lower overheads overseas, those carmakers are reducing risk over distance to improve lead times and transparency.

The priority now is on being able to respond with speed and flexibility to changes in production. Carmakers are putting a priority on working with suppliers that can respond quickly and adapt to changes in production. Balancing capacity, competitiveness and proximity aligns well with the European automotive sector’s production priorities.

In Spain, there are more than 1,000 automotive suppliers and more than 60% of what they produce is exported to wider Europe, with France and Germany being the top two destinations. Companies there are reinforcing their production capabilities and adapting to different markets and standards, something that is essential in an increasingly demanding and globalised environment.

According to the Spanish automotive parts manufacturers association, Sernauto, suppliers are doing this through process optimisation and the adaptation of existing production lines to support new programmes. This means not only a broad diversification of customers, but a strong ability to adapt to different industrial environments and business cultures, enabling suppliers to operate efficiently in a wide range of markets.

Synchronising for complexity

Read more: Seat’s logistics director Enric Brau wants to inspire boldness in digitalisation and electrification

Enric Brau, who replaced Enric Martí as logistics director in December 2024, is building on Seat’s foundation in logistics digitalisation, automation and AI to expand EV output, be more resilient and meet changing customer demands in the supply chain.

At Seat, supplier selection is guided by a clear strategic focus on reliability, proximity and seamless integration into synchronised production flows, according to Enric Brau, director of logistics at Seat and Cupra.

“In an increasingly complex industrial environment, the company also places growing importance on partners that are digitally connected, flexible, and aligned with its objectives in automation and cost efficiency,” he said. "This approach ensures not only operational stability, but also the agility required to respond to evolving production demands."

Brau said that Seat and Cupra are actively advancing towards a more regionalised supplier base across Europe, a shift that reflects a strategic effort to reduce transport distances, strengthen supply chain resilience and enhance responsiveness to production changes.

“By developing a more localised supplier network, the company is building a robust and flexible model capable of adapting to an increasingly dynamic industrial landscape,” said Brau.

Currently, around 75% of the part references for vehicle production at Seat’s Martorell plant are sourced from Spain or neighboring European countries (excluding just-in-time suppliers). This strong regional focus enables Seat and Cupra to enhance supply chain resilience, reduce logistical complexity and respond more effectively to production requirements, while maintaining a balanced global supplier base where necessary, according to Brau.

Supplier coordination

Parts makers in Spain are responding to the local demand while keeping an eye on international markets. Maria Begoña Llamazares, markets director at Sernauto and spokesperson for its components intelligence platform, Autoparts From Spain, has said that parts developed in Spain are now integrated into vehicles produced across multiple international markets and platforms.

That demonstrates the ability of Spanish suppliers to adapt to different industrial, regulatory and logistics requirements. This is also closely linked to increased regional demand and the technological transformation of mobility driven by electric and software-defined vehicles.

“In addition, Spain’s highly consolidated industrial ecosystem, with leading suppliers, advanced technology centres and 17 vehicle manufacturing plants, means that this evolution is not isolated, but part of a coordinated development across the industry,” said Begoña.

Spain is strengthening its ability to adapt to different levels of activity while also handling greater industrial complexity within Europe, in line with this regionalisation process.

In terms of the technological transformation and the increasing complexity and software content of new vehicles, Seat is mainly relying on VW Group’s supplier ecosystem and the specialised partners VW Group contracts for the supply of high-value components. Brau said that a key role is played by VW Group Components, which is responsible for core technologies such as engines, gearboxes and battery systems, and helps ensure standardisation and industrial scale across brands.

“Components such as batteries, cockpits and front-end modules require advanced industrial capabilities and close integration with group-wide platforms and standards, often developed in collaboration with specialised suppliers,” said Brau. “This ecosystem approach enables Seat and Cupra to leverage technological expertise, economies of scale and innovation within the group.

Investment in technology

As indicated, demand is growing particularly for components linked to electronics, thermal management systems and battery-related solutions. There is a shift in the product mix and suppliers are incorporating more technological content and adapting their capabilities to changing vehicle requirements. According to Sernauto, this is reflected in the automotive sector’s investment efforts, with more than €1.2 billion ($1.39 billion) allocated to research, development and innovation, strongly focused on areas such as electrification and digitalisation.

“Ultimately, it is not only a matter of volume, but of evolving towards products with higher technological value,” said Begoña. “In addition, this transformation is fostering greater collaboration between manufacturers, suppliers and technology centres to accelerate industrial development and process adaptation.”

The market for battery electric vehicles (BEVs) has definitely been volatile in the last few years, with sales forecasts revised and production plans shelved. Yet BEVs continue to flood into Europe despite high tariffs on Chinese imports.

The lower-than-expected sales have forced carmakers and their suppliers to manage the transition more cautiously. Electrification is a structural trend, but the pace differs across markets and segments, according to Sernauto. This is leading suppliers to adopt more flexible strategies: continuing to invest in new technologies while maintaining capacity for current products.

Electric catalyst

Making electric vehicles at the Martorell and Pamplona plants in Spain has been the key catalyst in accelerating the regionalisation of the supplier base for Seat and Cupra, according to Brau. The Martorell plant has just started production of the Cupra Raval EV alongside the VW ID Polo and the VW plant in Pamplona has added the Skoda Equip alongside the VW ID Cross. The models are all part of VW Group’s new Electric Urban Car Family from the Brand Group Core.

“The launch of EVs on a shared platform across both plants has fundamentally reshaped the supply chain, enabling the consolidation of volumes, the development of a common supplier ecosystem, and significantly stronger industrial synergies at a regional level,” said Brau.

He noted that the alignment has not only increased scalability and efficiency but has also incentivised suppliers to localise their footprint in Spain, “strengthening the national industrial fabric and accelerating the development of strategic capabilities, particularly in areas such as the battery value chain and electrification components”.

As a result, the EV programmes in Pamplona and Martorell are acting as a structural driver to build a more localised, integrated and resilient supply network in Spain, positioning Seat and Cupra at the center of a rapidly evolving regional automotive ecosystem.

“Locating suppliers closer to the production plants also contributes to improving environmental indicators, as shorter transport distances help reduce logistics-related emissions and support a more sustainable supply chain,” said Brau.

As noted, the pace of electrification in Europe has not been without its problems and market volatility has led to some significant plans for EV and battery production being shelved. That means Seat is looking for suppliers with flexibility and resilience.

“[Seat] prioritises partners capable of adapting to fluctuating volumes and evolving production requirements, ensuring a supply chain that remains responsive and stable even in uncertain market conditions,” said Brau.

Logistics of nearshoring

The strengthening of Spain’s position as a regional exporter of parts has led to an increase in operational demands for logistics providers. When 60% of the sector’s turnover depends on exports, logistics becomes a critical element of competitiveness, according to Begoña.

“It is no longer just about moving goods, but about doing so with precision, under very tight timelines and with full integration into production processes,” she said. Moreover, in a nearshoring environment, speed and transport reliability are no longer simply operational factors, they become a competitive advantage, especially in an industry where response times are becoming increasingly shorter.

Spain has a solid logistics base and Begoña pointed out that this is supported by well-developed infrastructure and a broad network of operators, both international and local, with experience in the automotive sector. Good connections between road transport, ports and railways is helping Spain serve the main European markets while also maintaining global flows across its 170 global countries of trade, with notable growth in Morocco, Turkey and the US.

Spain’s geolocation as a natural connection point between Europe, Africa and the Americas provides significant advantages in terms of connectivity and diversification of flows.

The main challenge from a logistics standpoint to continue meeting demand for parts exports from Spain is in ensuring that logistics capabilities evolve at the same pace as industrial growth.

“This means advancing intermodality, particularly rail development, improving the efficiency of European transport corridors and continuing to reduce the carbon footprint of transport,” said Begoña

She added that it is also essential to reinforce capacity during peak demand periods and avoid bottlenecks that could affect supply continuity in an increasingly demanding supply chain.

Speed and transport reliability are competitive advantages for Seat, particularly at Martorell, and that is why it makes a careful selection of logistics providers that meet high standards in delivery performance, reliability and flexibility. Digital integration, real-time visibility of operations and alignment with sustainability goals are also essential criteria in selecting logistics providers, according to Brau. 

“In this regard, the company values providers that actively contribute to reducing the environmental impact of logistics, for example through increased use of rail transport and alternative fuels for trucks,” he said.

Seat is also using real-time monitoring through a control tower model to proactively manage potential disruptions, as well as maintaining lean inventory levels to optimise working capital. That increases the importance of reliable and fast transport processes across the supply chain.

“Close collaboration with outbound logistics providers also ensures that delivery lead times to customers are consistently met, reinforcing customer satisfaction and brand competitiveness,” said Brau. “Sustainability initiatives, such as the increased use of rail transport, further reinforce a resilient and efficient logistics network.”

Digital traces

Keeping pace with changing demands from the market and in the supply chain relies on greater transparency, something that has become an operational priority for vehicle manufacturers and parts makers alike. Various supply chain crises and the current geopolitical context, including the disruption through the Strait of Hormuz, have tested suppliers’ resilience. Begoña said that demonstrates ability to guarantee the supply of systems and components even in highly complex environments.

“At the same time, manufacturers are advancing the digitalisation of the supply chain to improve traceability, optimise planning and anticipate disruptions,” she said. “This includes systems integration, the use of real-time data and tools that enable more precise and proactive management of logistics and production flows.”

Digital technology is playing its part there and helping Spain’s automotive suppliers stay competitive. Investment in innovation accounts for 3% of the sector’s turnover, almost three times the average for Spanish industry, according to Sernauto, and is directly linked to improving both industrial and logistics processes.

“Digitalisation enables better supply chain integration, greater efficiency and, above all, faster response capabilities in an increasingly demanding environment where adaptability makes the difference,” said Begoña.

Transparent supply chain

As mentioned, Seat is using a control tower to centralise real-time monitoring of inbound supply operations. This enables end-to-end visibility of material flows, improved coordination between planning and operations, and early identification of potential risks. “Combined with just-in-time and just-in-sequence delivery models, this approach significantly improves traceability, responsiveness, and the ability to anticipate disruptions,” said Brau.

Seat’s supply chain strategy in Spain continues to be closely aligned with VW Group’s broader nearshoring approach in Europe and by strengthening local and regional sourcing and locating key suppliers closer to production plants, the company is reducing logistics complexity and building resilience. This strategy is particularly focused on core modules, such as interiors and batteries, supporting a more flexible and regionally integrated supply network, explained Brau.

For Seat and its suppliers, as well as the wider automotive supply chain, nearshoring is a strategic model for competitiveness. As electrification changes vehicle architectures and market volatility continues to test production planning, local integration is helping carmakers and suppliers respond quickly and operate with end-to-end visibility.