Cupra Tavascan concept by Seat is an indication of where the brand is heading.

Wolfsburg, Germany - Volkswagen wants to differentiate its brands more clearly, with Spanish brand Seat moving more upmarket to compete with Alfa Romeo, while Czech brand Skoda will focus more on the budget end of the market, Automotive News Europe reports.

Volkswagen’s product strategy boss Michael Jost told the publication’s sister title Automobilwoche that the company was “taking a very close look at possible overlaps in the product portfolios of all brands,” and that it was aiming to manage its brand identities “more clearly in future.” 

"Seat could represent even more emotional cars, as exemplified by its Cupra models. Skoda could serve eastern Europe markets more intensively, as well as customers seeking functionality even more intensively," Jost added.

According to Automotive News Europe, the Seat brand would chase Alfa Romeo with products that are more upmarket and exciting, and this would ultimately make them more expensive than Volkswagen-branded products.

Interestingly, Volkswagen tried to position Seat above Volkswagen in South Africa when the brand made a brief entrance here 13 years ago, but the plan backfired because the cars were actually positioned below VW products in the rest of the world.

However, a global push upmarket would almost certainly be preceded by a new range of products that match their higher price tags, and which were designed from the ground up to compete with the likes of Alfa Romeo. The latest range of Cupra-branded concept cars are a good indication of where the brand is heading, and no doubt that badge will become a more common fixture on future products.

It remains to be seen, however, if Seat will ever take another stab at the South African market.

Another potentially interesting prospect for the local market, although in no way confirmed, is the Skoda brand.

While it started off as a budget brand, it has gradually moved upmarket over the years. However, it is looking set to simplify in the coming years, by cutting back on some of the high-end features offered, and by focusing more on the Eastern European budget market, where Dacia, Hyundai and Kia currently compete.

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