SEAT Annual Report 2011 - Volkswagen AG

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SEAT Annual Report 2011 - Volkswagen AG

TIMELINE2011January 24. Connection of ‘SEATin the Sun’, Spain’s largestrooftop photovoltaic facility.March 31. Trading results for2010 presented. Improvement inall indicators.February 25. Alhambra chosenas ‘MPV of the Year’ in Portugal.The model receives several moreawards throughout 2011.April 19. Announcement, atShanghai Motor Show, of startingactivity in China.March 1. The urban SUV IBXprototype and new Alhambra 4unveiled at Geneva Motor Show.May 13. The IBX and IBEprototypes, and new designlanguage, showcased atBarcelona Motor Show.March 16. Agreement signed withCatalan government (Generalitat)for training and hiring of 700workers for Audi Q3.May 26. James Muir, declared‘Executive of the Year’ inCatalonia.


Welcome toENJOYNEERING


2011SEATANNUALREPORT


DESIGNDRIVENSEAT IS DESIGN DRIVENSEAT believes design gives technology a purpose – it brings technology to life.That is why SEAT crafts its cars with the greatest attention to detail, obsessed withprecision, always aiming to make them merge seamlessly with the driver’s life.


DYNAMIC


SEAT IS DYNAMICSEAT cars are fun to drive and designed to excite. Every part of a SEAT is built toperform, right down to the smallest detail. However, performance is not just amatter of power, it is rather to fine-tune everything, aiming for the most enjoyabledriving experience.


YOUNGSPIRITED


SEAT IS YOUNG SPIRITEDSEAT is urban and cosmopolitan. SEAT is curious, always wants to know more,experience more and explore more. SEAT is hungry for life and passionate, just likethe spirit of Barcelona, the region where every SEAT is born.


RELIABLESEAT IS RELIABLESEAT is a brand you can rely on wherever your journey may take you. As part of theVolkswagen Group, SEAT builds cars with the latest and most advanced technology.Everything is focused on delivering the best quality and safety to drivers – so theycan focus on the enjoyment.


EFFICIENT


SEAT IS EFFICIENTSEAT’s Ecomotive range has benchmark CO 2emissions. SEAT cars have a lowimpact not only on the environment but also on drivers’ wallets. Being efficientalso means rethinking what to build into a SEAT, clearly orienting design towardsfunctionality and people’s needs.


ACCESSIBLE


SEAT IS ACCESSIBLESEAT is a transparent brand, always at people’s sides, a brand that listensto people in order to feel what they feel. And that is why SEAT can give peoplewhat they want for an affordable price, as SEAT believes everybody shouldbe able to enjoy great technology.


We are Spanish and German.We are passionate perfectionists.We are emotional technologists.Everything we know, is everythingyou feel.We give design a purpose.We bring technology to life.We call itENJOYNEERING.We are SEAT.


CONTENTSPAGEPAGEManagement04 Letter from the Chairman of theBoard of Directors06 Letter from the Chairman of theExecutive Committee08 Board of Directors09 Executive CommitteeHistories and interviews12 Design16 Dynamism22 Young spirited28 Reliability34 Efficiency38 AccessibilitySEAT enjoyneeringPAGEPAGEManagement Report44 Industrial Activity50 Commercial Activity62 Brand and Product66 Research and Development70 Human Resources74 Corporate Social Responsibility82 Financial ActivitySEAT, S.A. Annual Accounts88 Auditors’ report90 Balance Sheet91 Profit and Loss Statement92 Statement of Changes in Equity94 Cash Flow Statement96 Notes122 Appendix 1. Evolution ofNon-current Assets126 Appendix 2. SubsidiaryCompanies


MANAGEMENT


LETTER FROM THE CHAIRMANOF THE BOARD OF DIRECTORS 04LETTER FROM THE CHAIRMANOF THE EXECUTIVE COMMITTEE 06BOARD OF DIRECTORS 08EXECUTIVE COMMITTEE 09


04 | ANNUAL REPORT 2011 | LETTER FROM THE CHAIRMAN OF THE BOARD OF DIRECTORSDr. Francisco Javier García SanzChairman of SEAT, S.A. Board of Directors.


06 | ANNUAL REPORT 2011 | LETTER FROM THE CHAIRMAN OF THE EXECUTIVE COMMITTEEJames MuirChairman of SEAT, S.A. Executive Committee.


LETTER FROM THECHAIRMAN OFTHE EXECUTIVECOMMITTEEChanges initiated in 2009 have gradually taken shape. We arelaying the foundations for the future and, although we havenot yet reached our objective, we are on track with a businessplan that is going to fill Martorell’s production capacity and takeus into the black. The way to get there is clearly marked – wemust increase sales volumes, increase profitability and improvequality.Recessions in major European economies, and particularly inSpain, have not made things any easier. This notwithstanding,SEAT ended 2011 with a 3.1% increase in sales, as well as anacross-the-board improvement in operating income, businessfigures as well as other indicators. Some markets – Germany,France, the UK and Mexico, to mention a few – providedoutstanding results. Exports too grew by 11.4%, boosting theoverall increase in sales.And these results point the way forward. Today, SEAT sells fourof the five cars it produces outside its home territory. Even so,we have to redouble efforts to become a company with an evengreater global reach. With Western Europe in crisis, now morethan ever we need to have a presence in China, where we havebeen working hard throughout 2011 so as to market our carsthere this Spring. At the same time we are gearing up for thegreatest product offensive in our history. For the first time ever,SEAT will be showcasing a new model every quarter, somethingthat will enable us to broaden our product range and increasemarket coverage.That SEAT should meet the goal it has set itself will be good newsnot only for those of us who form part of the company. As HRH thePrince of Asturias and Girona said during his visit to our facilitiesfor the official opening of the new Audi Q3 production centre“we are setting an example for Spain”. And this example, in turn,should be a tremendous responsibility for each and every oneof us. Spain needs successful business projects to raise moraleand give people their confidence back. The conclusion of anexemplary Collective Agreement and hiring of more than 1,300new employees at a time when the number of unemployed inSpain topped the five million mark are eloquent examples thatspeak for themselves.SEAT is showing signs of a response to the confidence placedin it by the Volkswagen Group. The staying power and thesupport provided by the Group have been constant, crystallizingthrough middle- and long-term investments. Growth meansinvestment, even when times are hard, and we are devotingsubstantial resources to creating new products and improvingmanufacturing processes.We must also be demanding of ourselves, and work with almostobsessive attention to detail. We should be passionate aboutperfection, and values like stringent demands and responsibilityshould be our daily traveling companions, so as to offer ourcustomers better products. With a wider product-range, newmarkets and greater commitment, our ambitions should beboundless.James MuirLETTER FROM THE CHAIRMAN OF THE EXECUTIVE COMMITTEE | ANNUAL REPORT 2011 | 07


BOARDOF DIRECTORSChairmanDr. Francisco Javier García SanzBoard MembersMartin MahlkeJames MuirMatthias MüllerKlaus-Gerhard WolpertSecretary and Legal CounselLuis Comas Martínez de Tejada08 | ANNUAL REPORT 2011 | BOARD OF DIRECTORS


EXECUTIVECOMMITTEEMembers of SEAT, S.A. Executive Committee.8 7 416 2 531 James Muir Chairman2 Holger Kintscher Finance & Organization3 Ramón Paredes Governmental & Institutional Relations4 Dr. Matthias Rabe Research & Development5 Josef Schelchshorn Human Resources6 Dieter Seemann Purchases7 Paul Sevin Sales & Marketing8 Dr. Andreas Tostmann ProductionThe Board of Directors appointed PaulSevin as Sales and Marketing Vicepresident,with effect from April 1,2011, replacing James Muir, who hadtaken over temporarily this post for oneyear.The Board of Directors appointedDr. Andreas Tostmann as ProductionVice-president, with effect from December1, 2011, replacing Wolfram Thomas.EXECUTIVE COMMITTEE | ANNUAL REPORT 2011 | 09


HISTORIES AND INTERVIEWS


DESIGN 12The flamenco of Sara Baras, fusingemotions with technique and passion.DYNAMISM 16Jaime Alguersuari, a biographicallook at the talented, young Barcelonarace driver and DJ.YOUNG SPIRITED 22Barcelona and Berlin, two cities sharingmultifaceted cultural atmosphere.RELIABILITY 28The keys to success, as told by chef CarmeRuscalleda and synchronized formerswimmer Gemma Mengual.EFFICIENCY 34European Green Capitals, rewardingenvironmental improvement andsustainable development.ACCESSIBILITY 38SEAT DNA, three companyworkers get personal.


SARA BAAfter more than 20 years of stage performances, Sara Baras still shows her mettle as shecontinues bewitching audiences with the purity and compelling power of her dancing. Anillustrious citizen of Cádiz (southwestern Spain), Baras pays special homage to her hometownwith La Pepa, a new show in honour of Spain’s first Constitution (1812), which will again takeher to theatres all over the world.12 | ANNUAL REPORT 2011 | DESIGN


Sara Baras is one of the best-knownambassadors of Spanish culture. The keyto her success lies in her seductive moves,resulting from the perfect fusion betweentechnique and passion.Precision, perfectionism and dedicationare values that define this artist, andones she shares with SEAT: maximumattention to detail and constant strivingfor excellence. Irresistible lines andcaptivating strength that fascinate thepublic. For our internationally acclaimedflamenco dancer, dance and music are nodoubt the best ingredients for designingemotions.RASflamenco dancerOn the occasion of the bicentenary ofSpain’s first Constitution, Sara Barasreturns to the stage with La Pepa, atribute to the liberal legal framework thatsignalled a turning point in the history ofour country.What does La Pepa mean to you?It’s an honour and a privilege to create ashow based on an important historic eventsuch as the 1812 Constitution, whichestablished several principles of freedom.Two hundred years later, we’re still proudthat this historic milestone was createdin this blessed Andalusian land:San Fernando and Cádiz.PETER MULLERDESIGN | ANNUAL REPORT 2011 | 13


Is this performance your first homage toyour hometown of Cádiz?Cádiz is always present in my dancingand my emotions, but never as intenselyas on this occasion. The details thatstand out in this Pepa transport medirectly to that corner of the world, andI love it!You previously played the role of otherwell-known figures in Spanish history,like Juana la Loca and Mariana Pineda.What do you share with these historicalfigures?I like to think that my way of dancinghas the courage that characterises ourhistorical figures, who put their idealsbefore anything else. They have mydeepest admiration.Strong, passionate characters. What ispassion to you?Something absolutely essential. That’s whypassion features so strongly in my shows.Even though the slightest thing to me is anexcuse for dancing, passion is what turnsany story into something deeply magical,even one you’d never expect.14 | ANNUAL REPORT 2011 | DESIGN


Is this passion a necessary prerequisitein order to captivate?I firmly believe you can move thespectators with anything that containsthe truth. Besides, it’s essential for meto combine technique with heartfeltemotion. You study for years to be ableto get carried away by what you feel,without concentrating on technique, butwith the physical training behind it.Besides directing and performing,you also design your performances.How would you describe this creativeprocess?When I design my shows I don’t necessarilyhave the spectator in mind. I focus on whatI want to tell them and fill it with details anddashes of beauty. However, when performingin front of an audience I like to dance to eachand every soul and feel that all the energythat flows out, flows back to me.The language of your dancing is based onseduction. How do you manage to seduce?I guess that by paying attention to thedetails and proving that the combinationof thousands of hours of work and thespontaneity of the moment is wonderful.You stand for the balance betweenthe most traditional and modernflamenco. Are tradition and innovationcompatible?Absolutely. Every artist’s personalityis different and innovative: the mosttraditional work interpreted by someonetoday is precious. Not only do I think thattradition and innovation are compatible,but also essential, without forgetting whoyou are and where you’re coming from.Your career has been built around thedesire to continue innovating. What hasSara Baras contributed to flamenco?I believe I’ve given it my way of seeing,feeling, and dancing flamenco. It’simportant to go forward, grow andstudy to be able to keep giving.Although to many, flamenco is anessentially Spanish dance, you havesuccessfully taken it to stages all overthe world. How do you explain thesuccess of such a localised art formin such unlikely places as China orRussia?Dance, and especially flamenco, is anart form that emanates straight fromthe soul – its language is universal andit knows no boundaries. My experienceof dancing in these countries has beenmarvellous. You’d never imagine thatthe audience can enjoy it so much.Is the Sara Baras who performs to aforeign audience the same one weknow?Yes, I don’t adapt my performancesaccording to the audience I dance to.I don’t usually make any changes,and it surprises me greatly that evenif they observe different customs andhave a different language and culture,every time the curtain goes up theyunderstand it perfectly. It’s highlyrewarding. The way they feel flamencois very special.What moved you to perform sofar away from Spain?It helps you discover other culturesand different ways of seeing thingsand it gives you the chance to continuelearning. It’s a gift to be able to take thename of Spain and flamenco all over theworld.DESIGN | ANNUAL REPORT 2011 | 15


16 | ANNUAL REPORT 2011 | DYNAMISM


DRIVEN BYTECHNOLOGYJAIME ALGUERSUARI, RACING DRIVER AND MUSICIANThe name Jaime Alguersuari is synonymous with youth, daring and triumph. Hispassion for speed and music make him the ideal ambassador for SEAT. Surrounded bytechnology, to Alguersuari life is meant to be lived with excitement, determination, andespecially emotion.Jaime Alguersuari defines himself as veryemotional. “The ability to infuse feelinginto everything you do gives you thechance to experience life to the fullestand enjoy everything life offers”. Behindthe wheel of a Formula 1 or at a DJ mixer(his second biggest interest after racing),this 22–year-old from Barcelona strives tocounteract the coldness often associatedwith technology, which is such a big partof both activities. “Technology is full ofemotions”, he says, convinced that givingeverything he’s got is what has made himget this far in life and continues to drivehis future.To many people, precociousness isthe hallmark of Jaime’s career. That’sunderstandable in view of the fact heholds the record for being the youngestdriver to compete in Formula 1. Hisdebut came on 26 July 2009, when hewas only 19, on the Toro Rosso team.However, he doesn’t feel pressured bythe expectations surrounding his earlyappearance on the racing scene, withDYNAMISM | ANNUAL REPORT 2011 | 17


millions of followers worldwide. “I’vealways been an early developer”, hesays, remembering that when he wasjust 8 years old he was already drivingkarts and was the youngest driver to wina prestigious British F3 InternationalSeries. Other racing greats who alsoparticipated in this category (and whowent on to be world champions) areNelson Piquet, Ayrton Senna andJenson Button.Button./ DRIVING TO WINWith the modesty of one who considersthat, in addition to a considerableamount of natural talent required bya successful driver, the secret of theFormula 1 lies in the daily work done offthe track, Alguersuari claims that his twoseasons with the Toro Rosso team havebeen a testing ground to allow him tocompete with the best. “I’m qualifiedto be at the front and achieve thebest results”.18 | ANNUAL REPORT 2011 | DYNAMISM


“I’m qualified tobe at the front anddon’t want to driveon a team with noambition”DYNAMISM | ANNUAL REPORT 2011 | 19


Now his objective is to drive to win. “Idon’t want to drive for a team with noambition”. Alguersuari knows that thereare two categories of drivers on the racingscene – those with an option of beingamong the top 10, and the rest. He isconvinced that once behind the wheel ofa state-of-the-art racing car, the driver hasto contribute some added value. “Thereis little difference between the two andthe best set themselves apart by theirdecision-making ability”.“At times you succeed, at times you fail”,claims Alguersuari, who attributes thisfact to the logic behind a profession thatconstantly pushes you to extremes. “We tryhard for something that in many cases isjust not possible”. To win in this discipline,where speed is “just a notion that dependson the moment”, you have to leave yourpersonality behind. “It’s an exercise in selfcontrolthat helps you get the most out ofyour car and make progress as a driver”./ MAKING SENSE OF LIFE THROUGHMUSICAlguersuari fully accepts theobligations of Formula 1 and haslearned to control himself to be abetter driver and a better person.His calm demeanour only snaps,he claims, when this required selfcontrollimits his ability to put hisheart into everything he does. “Lifeis meant to be lived with excitement,determination, and especiallyemotion”. Although Formula 1sometimes curbs his impulsive desiresto get the most out of life, he canalways fall back on his musical talentto make up for it.“I make music to express my feelings”,he says. Organic Life, released in2011, is his first work as a musician.He has recently presented Asambleamusical, a 10-minute electronic musicsingle that showcases his passion fordigital technology as a means of selfexpression,which is fondly reminiscentof styles such as Depeche Mode,Vangelis or Matthew Dear. “Musicbrings people together and helps meunderstand the world”, he says.For Jaime, performing live music giveshim an adrenaline rush that is notunlike the way he feels as a driver onthe starting grid of a race. The perfectcombination of emotion and feeling,aspects he considers fundamental forliving life to the fullest and which impelhis current aspirations– to consolidate his own sound in themusic industry and become Formula 1world champion. If he could have it hisway, “in the last race, almost at the lastbend, just like Hamilton in 2008”.It couldn’t be any other way for thisthrill seeker who wants his life and hisfeelings to always go hand in hand.“THANKS TO THE CIRCUIT DE CATALUNYA”20 | ANNUAL REPORT 2011 | DYNAMISM


“Music bringspeople togetherand helps meunderstand theworld and expressmy feelings”DYNAMISM | ANNUAL REPORT 2011 | 21


BARCELONABERLIN22 | ANNUAL REPORT 2011 | YOUNG SPIRITED


Berlin and Barcelona make up a curious pairing of cultural capitals, with a contrast between the coldtemperatures of one and the warm climate of the other, the Spree River and the Mediterranean Sea,the Fernsehturm and the Agbar Tower. Two eclectic, metropolitan cities that promote urban cultureand that, despite their different backgrounds, are the workplace of a vast assortment of internationalartists. Not only are the creative forces fully dedicated to expressing art but the cities’ inhabitantsthemselves, who set trends with the clothes they wear, the music they listen to, the performing artsthey watch and the night spots they patronize.Barcelona and Berlin, two cultural capitals linked by their mutual youthful character and appeal;two cosmopolitan cities with a penchant for creativeness, adventure, dynamism and originality.YOUNG SPIRITED | ANNUAL REPORT 2011 | 23


M.A.N.D.Y.With electronic music firmly rootedin Berlin, M.A.N.D.Y. (Philipp Jungand Patrick Bodmer) and BookaShade made the move to thecapital in 2000 where they freelydeveloped their ideas and beganpromoting artists akin to the GetPhysical label they soon founded.Today, Get Physical is one of themost highly respected names in theelectronic music industry. They aremaking headlines again in 2012with three new releases by BookaShade./ MUSICIt’s difficult to compare the Januarysun that bathes Barcelona on themild Mediterranean coast to the bleakatmosphere in Berlin whose winterseems eternal. But when the same yetdifferent sun sets, darkness softensthe differences between both cities,symbols today of the new Europeanavant-garde. “Berlin and Barcelonaare two enormously creative places.They both create their own style inmusic, art and fashion. It’s somethingthey have in common and yet, alsosets them apart”, says successfulM.A.N.D.Y. DJ and electronic musicproducer Philipp Jung.Since settling in Berlin in 2000, M.A.N.D.Y.has redefined Berlin’s nightlife withsolid rhythms packed with crystal clearsound. Rhythm that can often be heardon the shores of the Spree, coming fromthe Watergate, one of the city’s mostacclaimed hotspots. Philipp praises thealternative scene found in Spain, andespecially in Barcelona, where “people arealways trying new things and are open todiversity. You get the feeling that artistscreate music from what they feel deepinside. Not all of them, of course, but mostof them”.This is probably a good reason whyMarc Barrachina, Oscar D’Anielloand Helena Miquel got together toform Facto Delafé y las Flores Azules.Nowadays, with Marc no longer inthe band, they’re simply Delafé y lasFlores Azules. Oscar and Helena hailfrom separate Barcelona-based bands,and admit that their evolution wouldnot have been the same without theopportunities that the city had to offer.“We lived through a period where therewas no indie pop rock culture so webegan creating it on our own. The 90swere coming to an end and we startedwith no prior influence, together withbands like Love of Lesbian, Standstill orSidonie. Since nobody else was movingin that direction, we were able to createwith all the freedom in the world”, saysHelena. Picking up where she leaves24 | ANNUAL REPORT 2011 | YOUNG SPIRITED


DELAFÉ Y LAS FLORES AZULESDelafé y las Flores Azules (HelenaMiquel and Oscar D’Aniello) is asurprisingly successful Spanishband that broke onto the indiescene thanks to a combination ofelectronic melodies and poetic lyricsthat are both meaningful and catchy.Their leap to fame came in 2004when one of their compositions waschosen song of the month by a radioprogramme. Since then they haven’tstopped composing and performing.Their most recent tour ends thisMarch, but they’re already workingon a new album.off, Oscar adds, “together we haveproduced a sound that is gaining on themainstream, which considers music asa product”.“Neither M.A.N.D.Y. nor Get Physicalwould be what they are without themagic of Berlin”, claims Philipp. “GetPhysical is a label that is directlyassociated with a specific lifestyle. Welook for a special feeling, and Berlinhas it. Everything is related to creativefreedom and individuality, and at thesame time with a new twist to technohouseand the incredible nightlife thatmakes Berlin unique”. He goes on tosay that “Barcelona and Berlin aretightly connected by electronic music.Besides, a lot of people in the businesslive and work out of these two cities”.Oscar also appreciates the connectionand admits that they themselvesare highly influenced by electronicmusic. “The 90s were the boomdecade for this kind of music becauseit began to coexist alongside indiemusic. Electronic music stood forrevolutionary individualism, givingartists the chance to create a world oftheir own”.After more than 10 years on the musicscene in their respective styles andsurroundings, both M.A.N.D.Y. andDelafé y Las Flores Azules still feel astrong creative urge. “We haven’t lostour identity. We’ve slowly been puttingour naïf outlook aside and now we’remore mature, we convey different thingsand our live performances are moreorganic, more energetic”, boasts Delafé.Philipp also mentions maturity,especially with respect to his objectives.“With our label Get Physical wewill continue to convey our view ofelectronic music to the entire world. Wewant to highlight currently unknownartists who have a bright future aheadof them. Regarding the future ofM.A.N.D.Y., we want to continue beingcurious and creative and improvethrough hard work”.YOUNG SPIRITED | ANNUAL REPORT 2011 | 25


JUDITH COLELLJudith Colell is already anestablished film-maker. Born inBarcelona, her film career got offto a blazing start and her secondshort film, Escrito en la piel (1995)was nominated for a Goya Award inthe category of best fictional shortfilm. Her latest work, Elisa K (2010),co-directed by Jordi Cadena, wonthe Special Jury’s Award at theSan Sebastián International FilmFestival. She is also currentlythe second vice-president of theSpanish Academy of Motion PictureArts and Sciences.“THANKS TO THE TIBIDABO AMUSEMENTPARK”/ CINEMAHard-working, intuitive, young, andaccessible – all adjectives that describetwo women: film director Judith Colellfrom Barcelona and actress KatharinaRivilis from Berlin, who cannot holdback from praising their own country’sfilm industry. They both coincide whenemphasizing the transparency of Spain’sand the formality and precision ofGermany’s film industries.Of the Spanish producers, Katharinastresses “how explosive and bravethey are when going into the mostexperimental ground”. She loves filmsby Almodóvar and Luis Buñuel, andfinds international co-productionsthat use the city of Barcelona as abackdrop appealing, like Woody Allen’sVicky Cristina Barcelona and CédricKlapisch’s L’auberge espagnole (‘PotLuck’). “Their films are full of light,unlike our own”.According to Judith, “German film-makinghas a tremendously solid history, withinfluential names like Werner Herzog,Wim Wenders, Margarethe von Trotta orMichael Haneke. Film history is truly full ofimportant German film directors”.Katharina says German film’s influenceis due to the country’s historicaland political background, andespecially the capital: “Berlin is a citywhich, historically, has always beensignificant. When the Wall came down,two different worlds collided, bringingabout constant changes in the city”.In big cities like Berlin and Barcelonait’s precisely that dichotomy betweenexperimental and commercial that26 | ANNUAL REPORT 2011 | YOUNG SPIRITED


KATHARINA RIVILISKatharina Rivilis is an excellentexample of Berlin’s current actingtalent, which is immersed in thecity’s vast cultural circle. Straddlingthe stage and the big screen,this young actress has writtenthe script of films like Boat Trip(2010) directed by Valerie Heine,acted in the German TV series DerKriminalist (2006), starred in thefilm Shadows in the Distance (2012)directed by Spaniard Orlando Boschand performed on stage in DerMann mit dem Goldenen Gebiss,directed by Lydia Punk.nourishes art– in this case cinema –and makes it flourish. That’s why Colellstresses the significance of the progressmade through experimental productionin Berlin. “I know there’s an active schoolin Berlin, with new members makinginnovative, risky, radical films – the kindof film I feel right at home with”.Katharina completely agrees with thisassessment. “Berlin is one of the fewEuropean cities that hasn’t sold itselfout completely, making it possible forartists from all over to live comfortablyand at the same time be inspired byits harsh beauty, with its contrasts andcontradictions. The German governmentstill subsidises the film and theatreindustries and contributes towardsgenerating content that is not necessarilystrictly commercial”.“Film production in Spain is alsocharacterised by this duality”,explains Colell. “Both kinds of filmlive in perfect harmony. On the onehand there’s radical, festival-gearedindependent film, which is absolutelyessential and has a long track-record.On the other hand, more immediate,box-office hits. And there’s even anin-between category, independent filmthat becomes highly successful. Herein Spain there’s room for all kinds”.Two very different cities but with acommon denominator – a constant,trendsetting evolution in creativity. Colellwraps it up succinctly: “Cultural life inboth cities is highly visible. Citizenstake an active role in its creation andpromotion and both cities possessa contemporary, daring and radicalcharacter. In short, both are cities of theutmost avant-garde”.YOUNG SPIRITED | ANNUAL REPORT 2011 | 27


THE KEYS TOSUCCESSCarme Ruscalleda and Gemma Mengual share their secrets28 | ANNUAL REPORT 2011 | RELIABILITY


CARME RUSCALLEDACarme Ruscalleda is one of the best-known chefs on the planet.For several years, her restaurants have been heavily featured inthe Michelin Guide and she has also received other prestigiousawards such as the Creu de Sant Jordi from the CatalanGovernment or the Marqués de Busianos prize for the presenceof Spanish gastronomy in the world. She began her professionalcareer together with her husband, Toni Balam, in a family-rungrocery and butcher shop. She soon started preparing homecookeddishes for take-away, which led her to follow up with herown restaurants. She opened her first restaurant - Sant Pau - in1988 at a seaside town north of Barcelona, followed by Sant PauTokyo some years later in 2004.GEMMA MENGUALBarcelona-born Gemma Mengual is one of Spain’s mostacclaimed athletes ever. She began synchronised swimmingat the tender age of 8 and is still one of the sport’s bestknownnames. Her athleticism, elegant artistry andtechnical skill combined with dedication to her sport madeher a world-wide icon of synchro swimming, winning 39medals throughout her sporting career, including silverin both the duet and team events at the 2008 BeijingOlympics. After her recent retirement, Gemma is currentlyfocusing on personal projects, but at the same timeunfailing in her full support to future generations ofsynchro swimmers.Quality, commitment and talent are factors that make you stand out; they are essentialrequirements for achieving excellence, altering emotions and leaving a good impression.Although aware that perfection does not exist, and is therefore unattainable, CarmeRuscalleda and Gemma Mengual still strive for it day by day in a never-ending search thatchallenges them to keep working at what they most love doing.RELIABILITY | ANNUAL REPORT 2011 | 29


Chef Carme Ruscalleda and formerswimmer Gemma Mengual are two verydifferent women, but with more thingsin common than they would expect.They meet up in downtown Barcelona,the city where SEAT was foundedover 60 years ago. The location is ahigh-end gourmet delicatessen thathas recently opened a restaurantsection, a unique locale for twoprofessionals who are not satisfiedwith being simply another player intheir respective fields: “You have to beuniquely different”, says Ruscalleda.Both share the formula of genius– talent, skill, conviction, drive,inspiration and self-criticism.Neither of them put their faith in luckand settle for hard work instead.“Dedication and sacrifice, push yourselfto the limits and then go further”, sumsup Gemma. A commitment that requiresyou to love what you do, enjoy yourchosen profession. “Fall in love withyour profession of choice and strive tobe the best”, recommends Carme.It is precisely that passion andrespect that have allowed Mengualand Ruscalleda to receive the highestrecognition in their specialties – severalgold, silver and bronze medals, and fiveMichelin stars. “The way I stand out isby giving 100% of myself, letting myselfget carried away by the music and myemotions. The choreography may bealright, but executing it with emotion iswhat makes it special”, claims Mengual.Ruscalleda adds “gastronomy is an artthat needs no translation. Like music,when it becomes a sensual pleasure itcan take you back in time or even helpyou discover something new”.Passion and technique are the twosides of excellence. Revere what you doand strive for perfection; focus on thedetails. Practice, experiment, repeat andanalyse. “The difference is the resultof a lot of little details adding up”,states Ruscalleda, who adds: “Similarto a music score, you have to be aperfectionist; the piece has to soundthe same each time”.This level of precision requiresconstant hard work before reachingperfection, even though it does notexist. “But you can never stop trying”,says Mengual. Her sport demandscareful attention to detail to executea perfectly synchronised routine. Thesmallest error is unacceptable. “Youhave to know the choreography likethe back of your hand, keep polishingit and constantly add improvements”.Mengual remembers something a sportspsychologist once said, which is nowone of her mottos – “a true championknows how to adapt; a complainer getsnowhere”.30 | ANNUAL REPORT 2011 | RELIABILITY


TEAMWORKAdaptation is also a necessaryrequirement for teamwork. Goodresults in cooking and synchroswimming only come from thesynergies produced by the combinedwork of a skilled team. Mengual andRuscalleda are the visible figureheadsof their respective groups, but theyboth admit they could not stand outalone. “Teamwork implies acceptance.It helps you respect, help and accepthelp from others”, says Gemma. Thislearning process is sometimes difficult,but it brings added value that has apositive effect on the outcome.With no formal training as a chef,Ruscalleda is also self-taught inpersonnel management. In thebeginning she led a team of eight;today she manages a roster of 30 staffmembers. The secret? “They have totake pride in their work and pride intheir team. The objective is to make thecustomer happy”. What she expects inreturn is “precise coordination, like thegears in an engine”, besides respect forthe ingredients and for the customer, hardwork and self-criticism – “I need people toquestion everything I do and propose tobe able to carry on and keep innovating”.“A true championknows how toadapt; a complainergets nowhere”RELIABILITY | ANNUAL REPORT 2011 | 31


32 | ANNUAL REPORT 2011 | RELIABILITY“Fall in love withyour profession ofchoice and strive tobe the best”


For Ruscalleda, the best reward, andthe most difficult one to obtain, isbeing able to keep her team together.“Recognition has never been myobjective. I only want a team thatworks”. To achieve precision, boththe chef and the athlete resort to theopportunities provided by technology,which gives them confidence. InRuscalleda’s opinion, the onlyrequirement is to make good use ofit. “Technology cannot interfere insomething we already master. It shouldhelp improve the ingredient and the endresult and requires the intellect neededto get the most out of it”./ VENTURING FORTHBoth Ruscalleda and Mengual havecarried their success beyond ourborders, surrounding themselves withthe best in their areas of expertise andadmired by their peers. This privilegehas not gone to their heads; on thecontrary, professionally it gives them asatisfaction they are determined to turninto an obligation.Ruscalleda jokingly compares the diningroom of her seaside restaurant to the UN,since every day she receives guests fromall over the world who specifically cometo her restaurant to taste her food. “Thisreality fuels my personal commitment thateverything goes smoothly, to measureup to their expectations”. The same goesfor Mengual, especially when she findsout she has fans all over the world. “It’struly surprising, but exciting at the sametime, and you do your best not to let themdown”.Asia is a meaningful place for bothwomen’s track records. At the 2008Beijing Olympics, Mengual relishedtwo of the sweetest moments of hercareer – the two silver medals in theduet and team events. A few yearsearlier, in 2004, Ruscalleda opened anexact Japanese version of her famousSant Pau restaurant in Tokyo which notonly has been tremendously popular,but has given Carme a “mind-opening”experience, enabling her to discover anew cuisine, new techniques and newingredients.After talking for only a couple of hours,it seems Gemma Mengual and CarmeRuscalleda have known each otherfor a long time. Besides success, theyshare the same drive and passion fortheir work and a simple search forperfection. Materials, processes, skilland knowledge – both are aware of thekey components that make the engineof excellence work. The two of them payclose attention to what they do to stay ontop and to keep their passion alive. Andthey both face the future with a smile.The athlete, with her sights set on newpersonal projects; and the chef, intenton maintaining the standards of herrestaurant and evaluating new projects.And both of them are convinced thatthey are privileged and tremendouslyfortunate.RELIABILITY | ANNUAL REPORT 2011 | 33


EUROPEANGREENCAPITALS:CITIES TOLIVE INCHRISTIAN SPAHRBIERToday more than ever, there is a need to keep urban environments healthy.Four out of every five Europeans are city-dwellers, and it is essential to promoteenvironmentally-responsible policies. To this end, in 2008 the European Union set upthe ‘European Green Capitals’ award, in recognition of good environmental practices inEuropean cities. Stockholm and Hamburg were acclaimed as European Green Capitals in2010 and 2011 respectively. In 2012 it is the turn of a Spanish city, Vitoria, and in 2013Nantes. Four cities receiving recognition for their long-term environmentally-friendlyplanning and for the creativity with which they tackle challenges such a wastemanagement and noise pollution.34 | ANNUAL REPORT 2011 | EFFICIENCY


One of many green areas found in the capital city of the Loire region. NANTES MAIRIEFamilies prefer bicycles as mode of transport. SVARTPUNKT ABThe European Union is head ofthe field in the promotion ofenvironmentally-friendly policies, inits conviction that improvement inenergy efficiency and a commitmentto more sustainable solutions mustbe its hallmarks. The countries ofthe Old World are increasingly awarethat this commitment to sustainabledevelopment requires the wholesaleinvolvement of all players in society.Governments, industry, business, aswell as all ordinary citizens are all partand parcel of this sea-change.As a leading company in the automotivesector, SEAT is aware of this, and activelypromotes more eco-friendly vehicles andprocesses. One of the ground-breakingmeasures taken by the company isresearch into development of theelectric car in Spain. SEAT already hasthe first units of an electric prototype– the Altea XL Electric Ecomotive – andof a hybrid – the León TwinDrive. Thecompany envisages manufacturing thefirst units of a hybrid vehicle in 2015,followed by an electric car one yearlater. In the meantime, the company isalso leader in the low-emission vehiclessegment thanks to its E-Ecomotiverange. At the same time, SEAT has alsoshown its commitment to environmentalprotection in its production processes,via projects such as the ‘SEAT in theSun’ photovoltaic plant, dedicated railservices so as to reduce road trips, andthe ENERGEST system for optimal energyconsumption.Jordi Borja – geographer, townplannerand director of the Masters inCity Management at the PolytechnicUniversity of Catalonia – highlights theimportance of the measures taken bydifferent governmental entities sinceimprovement in the environmental qualityof cities translates into better qualityof life for their inhabitants. “Above andbeyond reducing air pollution and noise,what is really remarkable is that thesepolicies contribute to the creation ofinterpersonal relational spaces. Publicspaces become leisure places, wherepeople enjoy their free time and sportsactivities”.Technology is a basic tool when it comesto looking at a new model of innovative,eco-friendly cities. Cities which are smart,inhabitable and convenient bring on boardnew traffic and transport managementsystems. Likewise, they centralise theirpolicies via e-administration and developIT systems applied to sustainable mobility.City councils pay particular attentionto their environmental budget, andemphasize sustainability policies as thestrategic axis and a factor for growthopportunity, both economic and social. ForBorja, this effort is proof of a substantialparadigm shift vis-à-vis old town-planningpolicies. “It is important that thosecities making a true effort in the field ofsustainability be duly recognised”./ THE GREENEST CAPITALSStockholm, Hamburg, Vitoria and Nantes,thanks to their ambitious plans to cutemissions and their unique way ofmanaging public space, have becomebenchmarks for the development ofpractices encouraging sustainabilitywithin an urban setting.EFFICIENCY. | ANNUAL REPORT 2011 | 35


Rubbish collection system in Stockholm. SVARTPUNKT AB/ STOCKHOLM, FIRST GREEN CAPITALStockholm was the first city to bedesignated European Green Capitalby the European Commission in 2010.The Commission singled out the city’sambitious project in transport andemissions, embracing ambitious goalssuch as making itself a fossil-fuel-lesscity by 2050. Stockholm has cut CO 2emissions by 25% since 1990.aiming to cut CO 2emissions – 40% by2020, and as much as 80% by 2050.Hamburg invests heavily in thedevelopment of environmentallyfriendlypolicies, thanks to which thecity has already successfully cut backits CO 2emissions to 15% below thoserecorded for the 90s.Again, this Scandinavian city has one ofthe most innovative waste managementservices in the world, urban refusebeing transported through undergroundconduits via vacuum-powered systems forlater recycling of biodegradable material./ HAMBURG, INDUSTRIAL ANDECO-FRIENDLY METROPOLISStockholm passed on the title ofEuropean Green Capital to Hamburgin 2011. The city – the second mostpopulated in Germany after Berlin–has Europe’s second-largest port,making goods transport the region’smain economic driver, but withoutany deleterious effect on air quality.In the selection process for the title ofEuropean Green Capital, Hamburg gottop marks in eco-friendliness. Over thenext few years, this German city hastaken on board ambitious commitmentsWind turbines in Hamburg’s Energieberg Georgswerder. ROBERTO HEGELER36 | ANNUAL REPORT 2011 | EFFICIENCY


VITORIA: GREEN ON THE INSIDE, GREENON THE OUTSIDEVitoria has been designated EuropeanGreen Capital for 2012 thanks to itssustainable mobility plan, aiming at a10% increase in public transport thisyear. Currently the Basque capital has 90kilometres of cycle lanes, with restrictedaccess to the city centre for privatevehicles.In addition to this mobility plan, anotherhighly appreciated aspect was theGreen Ring (Anillo Verde), made up ofsix parks dotted around the city, witha total surface area of 500 hectares,offering 50 kilometres of nature trails forwalkers and bicycles. True green oxygenrichlungs in the midst of the Basquemetropolis.Nantes – a pioneer in bringing back the tram. NANTES MAIRIEAdditionally, measures such as theeco-friendly vegetable-gardens madeavailable by the City Council for theover-55s have met with tremendouspublic support. In view of this, theCouncil has set itself the challenge ofsetting up an urban vegetable-gardenpilot scheme on those publicly-ownedplots which are currently unused./ NANTES, EUROPE’S MOST LIVEABLECITYNantes is getting ready to inherit the titleof European Green Capital from Vitoria in2013. Respect for the environment hasalways been a distinguishing feature ofthis French municipality. In fact, its trackrecordin this field over the past few yearshas lead Nantes to be considered asthe most liveable city in Europe by Timemagazine.Since 2007 this capital of the Loire hashad an environmental protection planin place which aims to cut greenhousegases by 30% by 2020, and by 50% by2025. Additionally, the inhabitants ofNantes’ metropolitan area enjoy 3,366hectares of green belt – 57 squaremetres per inhabitant – and plans for2016 include three further wooded areasto cover 800 hectares. A truly greenmunicipality that improves the qualityof life of its inhabitants day by day.Sports activities in Vitoria’s green belt. PRENSA VITORIAEFFICIENCY. | ANNUAL REPORT 2011 | 37


The quality of SEAT vehicles is inherent to the excellent work anddedication put into them by each and every one of the brand’sstaff members. Authenticity, the desire to better oneselfand constantly striving for innovation are attributes thatdefine the company’s workforce, making the SEAT brandmultifaceted, multidisciplinary and highly accessible.SEATDNA38 | ANNUAL REPORT 2011 | ACCESSIBILITY


PAU DAVÍTESTING PHYSICAL AND MENTAL BOUNDARIESA lot of SEAT workers are surprised when they see a young manarriving at the Martorell facilities on a bicycle, wearing a formfittingcycling jersey. Pau Daví often cycles the 30-kilometredistance from his home in Barcelona to the SEAT factory, butnot just for the fun of it – it’s a part of his training routine. Paudevotes around 15 hours a week to swimming, cycling andrunning.After a shower in the factory locker room he changes intohis work clothes and it’s back to business as usual. “WhenI tell my colleagues I’ve been participating in triathlons andIronman events for the past 15 years they are amazed atmy sheer willpower”, claims Pau. Although he’s well awareof the extreme efforts he makes, to him it’s a comfortingactivity that gives him the opportunity to better himself dayafter day.Pau has been competing in triathlons for several years. “Nowit’s become more popular. I’ve been competing since 1997.At the early triathlons where I competed there were between50 and 100 registered participants, but at recent events heldin Spain there have been over 2,000 athletes”, he says. Everyyear he competes in around 15 events that help him train forthe gruelling Ironman Triathlon, consisting of a 3.86 km swim,a 180.25 km bike and a 42.195 km marathon run. Last year hefinished the Ironman in Regensburg, Germany in 10 hours and50 minutes. “It’s a good time, considering I’m not professional”.He is currently training before competing in this year’s Ironmanon June 24 in Nice, France.Pau’s participation in the Ironman series symbolises effort,sacrifice, discipline, willpower and self-improvement, all valueshe feels are necessary for his job at SEAT as IT Project Manager.“Sure, all this exercise is physically demanding, but mentallyit’s relaxing. After training I’m at peace, I feel a lot better andsatisfied with my hard work”.ACCESSIBILITY | ANNUAL REPORT 2011 | 39


ALICIA JARILLOHELPING THE NEEDYFor most people the summer holidays are the most longawaitedperiod of the year, a chance to forget about work, rest,and relax at the beach or in the countryside. But that’s nothow Alicia Jarillo sees it. Alicia works for SEAT in the HumanResources department, where she is responsible for the carbody paint staff. For the past several years, she has beenspending her holidays travelling around the world to help thosein most need.“On this kind of trip you don’t just go to enjoy the beautifullandscapes or explore new cultures, but to share a bit of yourknowledge, experience and work with others”, she says. Eversince she was a young girl, her upbringing at home and atschool led her to begin collaborating with social organizationsand religious associations in Madrid. Now she has less time tovolunteer so she spends her holidays on solidarity missions.“Even if the things I do have a low impact on others, that’senough to make me happy”.Alicia describes herself as dynamic and active. Sheloves the diversity surrounding her job, especially SEAT’scharacteristic mix of Spanish and German cultures. “Twodifferent work methods are a positive, enriching contrast”.But what she most likes about her job is the direct contactshe has with workers, exactly the same as in her private life.That’s why she began travelling on cooperation missions in2007, starting with Croatia, for the Missionaries of Charity,followed by Bolivia, where she went while studying todevelop a business plan for a beekeeping cooperative. Lastsummer she visited the congregation led by Sister Mandalain Pondicherry, India. She says she has learnt a lot from eachand every trip, but most remembers the children’s laughter.“You don’t understand or discover the real meaning ofgenerosity, selflessness and tolerance until you visitthose countries and see the situation those kids live in foryourself”.Alicia is already preparing this summer’s solidarity trip. Wherewill it be? “Probably a Central American country this time. Butthe place doesn’t matter as much as the personal experience ofhelping someone who needs it the most”.40 | ANNUAL REPORT 2011 | ACCESSIBILITY


RICARDO GARCÍATECHNO GEEKAfter nearly 15 years on the job, it seems RicardoGarcía is following in his father’s footsteps, as heworked for the company right up until he retired.In 1999, Ricardo was involved in a motorcycleaccident that resulted in the loss of his left arm.From then on he had to abandon the assembly lineand settle into other jobs that were more suitedto his disability. For the last seven years he hasbeen in charge of managing the vehicles kept inthe provisional holding area prior to any postproductiontesting. “I work alone in this division.Despite my disability, thanks to technology I’mable to tackle every task I’m assigned withoutanyone’s help”.From his workstation in Workshop 11 Ricardo getsto admire the technical advances made by SEAT inits endeavour to be at the forefront of technology.“The Martorell factory is producing vehicles thatrival with any other global manufacturer”, hesays proudly. Ricardo currently gets around in anautomatic SEAT Altea XL that has been adapted tohis handicap.Ricardo confidently remarks it hasn’t taken himlong to accept his disability, which he owesbasically to his character and fortitude. “I becameself-sufficient early on”, he explains. Now heenjoys his two favourite hobbies, good foodand sports, especially swimming and amateurathletics. He’s a bit of a geek and in fact couldn’timagine his life without technology. Like manypeople, he likes to surround himself with all thelatest gadgets on the market. “I see myself andothers see me as completely normal, someonewho is fully able to do the things everyone elsedoes, so it’s no use trying to put a label on me”,says Ricardo with conviction.ACCESSIBILITY | ANNUAL REPORT 2011 | 41


Management Report


Industrial Activity 44Commercial Activity 50Brand and Product 62Research and Development 66Human Resources 70CorporateSocial Responsibility 74Financial Activity 82


IndustrialActivityPRODUCTIONIn 2011 the Martorell plant once moreincreased production over the previousyear, thanks to a manufacture of the newAudi Q3 model.The first Audi Q3 rolled off assemblyline number 3 at Martorell on June 7,2011, thus bringing to a closure a stageof the project that had officially begunwith manufacturing being awarded inMay 2009. During this period, the planthas undergone sweeping changes, thebiggest being construction of the newbodywork workshop 6, officially openedin February 2011, equipped with stateof-the-arttechnology to deal with aproduction capacity of 500 body unitsdaily.On July 13, 2011, His Royal Highness thePrince of Asturias and Girona officiallyopened the Audi Q3 production centre.During his stay at the factory, he visitedthe new 30,000-square-metre bodyworkworkshop, and the assembly line it shareswith the Exeo.The Audi Q3 – the first premium car to bemanufactured in Spain – is a significantcontribution to the future of SEAT. With anestimated annual production of 100,000units per year, it will help the companyachieve a fundamental aim, i.e. reachmaximum production capacity at theMartorell plant. It also shows the clearcommitment of the Volkswagen Group toSEAT, and is indicative of the confidence ithas in the training and capabilities of theworkforce.This confidence stems from the continuousimprovement in the production processesthe company develops by means of itsown working methodology called theSEAT Production System (SPS). Two newTraining Centres were opened at theLaser welding at Martorell workshop 6.44 | Annual Report 2011 | Industrial Activity


Visit to SEAT by HRH Prince of Asturias and Girona.PRODUCTION AT THE MARTORELL FACTORY (UNITS)VARIATION2011 2010 ABSOLUTE %SEAT models 333,807 335,057 (1,250) (0.4)Ibiza/SC 150,446 160,799 (10,353) (6.4)Ibiza ST 40,737 28,284 12,453 44.0Altea 13,564 16,208 (2,644) (16.3)Altea XL 26,656 24,783 1,873 7.6Altea Freetrack 2,109 2,360 (251) (10.6)León 80,736 79,462 1,274 1.6Exeo 6,280 8,966 (2,686) (30.0)Exeo ST 13,279 14,195 (916) (6.5)Audi models 19,613 0 19,613 –Q3 19,613 0 19,613 –Total production * 353,420 335,057 18,363 5.5* Figures for 2011 and 2010 do not include 19,129 and 10,050 SEAT vehicles produced at other VolkswagenGroup plants, respectively.Industrial Activity | Annual Report 2011 | 45


odywork and painting workshops so asto display its advantages. Likewise theassembly area was equipped with a noveltool in the shape of the ‘Sala Profi’, whereit is possible to simulate almost any workstation of the line, offering workers theopportunity to practice the most criticaloperations with a view to improvingprocesses both in terms of qualityand ergonomics. The most importantchallenge, however, was organizing thetraining of the entire newly-hired directpersonnel for start-up of the Audi Q3.Again in the sphere of logistics, especiallyin-house processes, major advanceswere made in the implementation ofthe New Logistics Concept (NLK). To thisend, substantial changes were madein infrastructure and distribution atthe Martorell plant. Some of the moresignificant changes were re-organizationof truck traffic at the South access point,and the link between the logistics facilitywith the workshop on line 3 (Exeo/Q3)so as to house a 5,000-square-metrelogistics ‘supermarket’. These changesprevent the outside traffic of materialswhile achieving a smoother, cleaner flow.One of the initiatives instigated by thePrototypes Development Centre (CPD)is boosting the use of the digital factoryand virtual processes via the use of newtools and equipment. The ‘VirtuellerFahrzeugbau’ (VFB) allows for the virtualconfiguration of prototypes, providingimprovement in quality and a reductionof the time necessary for its construction.The installation of an assembly stationfor prototype bodyworks, known as the‘Framing Station’, provides greater qualityin geometry, and promotes flexibility foradaptation to new models. The settingup of a robot cell, with latest-generationrobots for welding prototype bodywork,also provides a significant increasein quality compared to the manualapproach. Also, the CPD once more gaveinstances of its capacity to innovate bybeing granted two new patents; one for ablister measuring process and another fora screw-driving tool.The Zona Franca plant continued with itshigh volume of stamped parts – producingmore than 52 million parts and setstargeted at the Martorell facility and othercentres of the Volkswagen Group. Renewalof the press lines once more gave rise toa considerable improvement in an alreadyhigh level of competitiveness. Also, SPSactivities spread further afield with thecreation of two new Training Centres atthe bodywork and press workshops. TheGearbox del Prat facility also raised itsproduction volume to 632,233 gearboxes,hitting the ten million mark since itsopening.The Audi Q3 – thefirst premium car tobe manufactured inSpain – shows theclear commitmentof the VolkswagenGroup to SEAT, andis indicative of theconfidence it hasin the training andcapabilities of theworkforce.Production at the Martorell factory (units)301,287335,057353,4202009 2010 2011SEAT range: Ibiza.46 | Annual Report 2011 | Industrial Activity


New bodywork workshop at Martorell production facility.Industrial Activity | Annual Report 2011 | 47


Passionate about perfection.QUALITYSEAT is committed to quality, seeing it asan essential priority value to achievingsuccess in all its spheres of activity.The Quality area keeps up a constantdevelopment towards the appropriate andcontinuous improvement of its productsand processes. This is an essential effort inorder to be able to compete in the currentmarketplace with its ever-increasingconsumer interest and demands.Throughout 2011 there was closecollaboration with the Production areaso as to improve SEAT brand models andguarantee an optimal launch for the AudiQ3, a premium vehicle entailing a majorchallenge, and which led to close andstronger links between all the company’sareas. There was also a continuation ofjoint action with the Purchases area tostrengthen collaboration with suppliersand increase quality levels in theirmanufacturing processes (Lieferantentageand Top Q meetings). This smoothflowingrelationship contributed to animprovement in products supplied,something that had direct repercussionson perceived quality by customers.In September the Martorell productionfacility underwent an audit carriedout by the China Quality Certification(CQC) organization. This certificate is arequirement of the Chinese governmentfor the brand’s cars to be marketed onits territory. Representatives from theCQC audited the Quality ManagementSystem and production conformity forthe Ibiza, León and Q3 models, givingour production plant the highest marks.To sell cars in the Chinese market it isalso necessary to pass diverse testsconcerning parts, vehicles and emissions.The León has already achieved this via theChina Compulsory Certification (CCC).48 | Annual Report 2011 | Industrial Activity


PURCHASESSEAT continued with its strategy ofreduction and optimization of costs ofmaterials and services, in spite of theever-changing volatility of the worldeconomy. Within this framework, oneof the company’s main objectives wasto develop diverse programmes withits suppliers to facilitate the efficientmanagement of purchases volume in theregion of 4,365 million euros.Once more the Material Cost Forum (ForumMaterialkosten) fulfilled all expectationsof reducing envisaged costs by meansof the implementation of 137 ideas ofimprovement, plus the rolling out of awide range of activities, particularly thesynergies obtained resulting from closecollaboration between Group companies.This commitment to the Consortium’scriteria such as process standardization,a clear definition of procedures,continuous training of personnel and theimplementation of world-wide agreedstrategies, enabled us to achieve greaterintegration in the Group, as well asoptimization of material and componentcosts.The implementation of the CapacityManagement Programme helps tooptimize the benefits of efficient planningby matching supply capacity of parts fromsuppliers to the company’s programmedproduction needs.Its Suppliers’ Sustainability Programmealso takes SEAT to a first-line positionin cooperation for environmentalprotection, by requiring of its suppliersa firm commitment to respect for theenvironment in all its processes andproducts.SAGA alloy wheel.New Alhambra, manufactured at VolkswagenGroup factory in Palmela (Portugal).Industrial Activity | Annual Report 2011 | 49


CommercialActivitySALESIn 2011 SEAT achieved retail sales of350,009 units, thus increasing figuresby 3.1% over 2010. The difficult worldmacroeconomic panorama hit theautomotive industry, and particularly soSpain, where sales posted a substantialdownturn when compared to the previousyear. Within this general context, althoughthe brand’s final retail sales in Spaindropped by 19.4% to a total of 73,652units, SEAT successfully maintained itsleadership position in registrations for thesecond year running.The main markets in Western Europe stillfailed to produce clear signs of recovery,except for Germany. This notwithstanding,the strategic growth plan developed bythe brand in the five major Europeancountries was successful in substantiallyincreasing sales in Germany (20.9%),France (14.6%), Italy (6.5%), and the UnitedKingdom (9.6%). This, together with thedetermined commercial initiative unrolledin international markets, with particularreference to Austria, the Netherlands andMexico, increased overall exports by 11.4%,reaching a total of 276,357 vehicles.While awaiting the product offensive tobe launched by the company during thenext financial year, 2011 was equally ayear full of new commercial changes. TheIbiza, León, Altea and Altea XL added theirrespective COPA versions, offering bettervalue for money in terms of equipment.The Alhambra range was also revamped bythe addition of four-wheel drive. The Exeoand the Exeo ST too saw the addition ofnew developments such as more leg-roomfor the rear seats, the Tiptronic automaticgearchange, a new front-end and interiorchanges, as well as more efficient enginesin terms of consumption and emissions.Finally, the brand returned to the segmentof urban compact cars with the launch ofthe Mii, which began to be marketed inSpain.Customer satisfaction, our raison d’être.50 | Annual Report 2011 | Commercial Activity


COMMERCIAL NETWORKSEAT’s sales network continued to successfullyadapt to changing circumstances in itsmarkets, and so saw its sales pointsnetwork contract slightly, ending the yearwith a total number of 1,828 sales points.This notwithstanding, by developingoptimization policies in the sales network,the company managed to consolidateits existing structure and bring about asubstantial strengthening of its presence inmetropolitan areas, thus correcting one ofthe brand’s main shortcomings.The reduction in the number of sales pointswas more than compensated for by thesetting up of a complete network of satellitesales points in countries like Germany andSpain, which successfully brought about anotable increase in the services to clients inthose markets. This policy of optimizationof the sales and marketing network willcontinue to be rolled out in other countriesthroughout 2012. The brand also increasedits international reach to include 76countries, by means of appointing newimporters. Above all else, special mentionshould be made of the start-up of SEAT’scommercial activities in China, as well as theboost given to its presence in Russia due toa change in importer.WHOLESALES OF NEW VEHICLES (UNITS)VARIATION2011 2010 ABSOLUTE %SEAT models 341,157 339,315 1,842 0.5Mii 614 0 614 –Ibiza/SC 147,671 158,763 (11,092) (7.0)Ibiza ST 39,098 27,263 11,835 43.4Córdoba 1 17 (16) (94.1)Altea 13,316 16,101 (2,785) (17.3)Altea XL 25,193 24,337 856 3.5Altea Freetrack 2,064 2,290 (226) (9.9)León 77,075 78,829 (1,754) (2.2)Toledo 0 10 (10) (100.0)Exeo 5,808 8,521 (2,713) (31.8)Exeo ST 12,678 13,397 (719) (5.4)Alhambra 17,639 9,787 7,852 80.2Audi models 17,813 0 17,813 –Q3 17,813 0 17,813 –Total wholesales* 358,970 339,315 19,655 5.8* Figures for 2011 and 2010 do not include 8,062 and 6,838 used vehicles, respectively.Wholesales of new vehicles (units)303,230339,315358,9702009 2010 2011SEAT range: Mii.Commercial Activity | Annual Report 2011 | 51


SEAT possesses a widespread, efficient assistance network.AFTER-SALESThe after-sales network continued toimprove its services. The warranty extensionprogramme, applicable to the third andfourth year of vehicle life, was widelyaccepted in a short period of time, andhas now become indicative of the brand’slong-term commitment to its clients. Thiscan equally be seen in the ambitious ‘PartsHorizon 2020’ plan, the aim of which is torespond to customers’ needs by defining newlines of business in the area of spare parts,as well as designing new global, logistic, andtechnological solutions to derive maximumbenefit from available resources.SEAT places the greatest possibleemphasis on and dedication to makingsure that the after-sales networkpersonnel is provided with the necessarytraining and technical equipment to dealefficiently with the advanced technologyused in its vehicles. One clear exampleof this can be seen in the 37 trainingmonographic courses already organized,both in-person and on-line, in which8,968 trainees participated.Quality service is SEAT’scommitment to its customers.52 | Annual Report 2011 | Commercial Activity


PRESENTATIONSAND MOTOR SHOWSSEAT trod Chinese soil for the firsttime in 2011 at the country’s two mostimportant motor shows – Shanghai andGuangzhou – to make itself known tothe general public and lay out in detailits development plans for the Chinesemarket. At the country’s economiccapital, the company displayed theLeón and the Ibiza, those vehicles it willmarket there initially; at Guangzhou theAlhambra was added, as were the threeprototypes unveiled over the past fewmonths – the IBE, the IBX and the IBL.At the Geneva Motor Show, the brand hadunveiled its hybrid electric prototype theIBX (a compact SUV) and at Frankfurt a newsaloon concept, the IBL. At these respectiveshows the company also unveiled the newAlhambra 4 and a revamped Exeo. Thelatest Barcelona Motor Show provided thebackdrop for the presentation of the newLeón FR, as well as the Ibiza Spotify and theCOPA range.Presentations came fast and furious in 2011,the most outstanding of them all being thenew addition to the family – the SEAT Mii.The trade press also saw and tested othernew vehicles such as the Alhambra 4, theLeón FR and the new Exeo.IBE and IBX concept cars at Barcelona Motorshow.SEAT León at Shanghai Motorshow.James Muir, Chairman of SEAT, at Geneva Motorshow.Commercial Activity | Annual Report 2011 | 53


SPONSORSHIPSports and music. Music and sports. SEATwent straight to the hearts of hundreds ofmillions of people via its sponsorship ofsporting events such as the UEFA EuropaLeague, one of the most prestigiousfootball clubs international competitions.The brand’s identity profile was alsoraised exponentially via sponsorship ofother tournaments such as the final ofthe King’s Cup and Spain’s Supercopa, aswell as agreements with Spanish footballleague teams like Valencia CF, Seville FC,Athletic Club de Bilbao, Real Zaragoza,Real Betis Balompié or Villareal FC, for allof whom SEAT provided official vehicles.It hardly needs to be said that sportinglinks also came from the world ofmotoring. Formula 1 driver and thebrand’s international ambassador JaimeAlguersuari transmitted the valueswe share worldwide, especially at theeagerly-awaited SEAT Lounges at the mainmotor shows. SEAT also has ambassadorsin different countries, who contributeto raising the brand’s profile. Still inthe world of motorsport, SEAT was alsopresent at the Wörthersee, the traditionalGTI meet in southern Austria, and tookpart for the first time in the Goodwood‘Festival of Speed’ in the United Kingdom,as well as being present in force at theBarcelona Retro Motor Car Show.In the same year as the first appearanceof the Ibiza Spotify, music onceagain provided the backbone forcultural sponsorship. SEAT sponsoredinternational festivals such as the ‘Rockam Ring’ held in Nürburgring (Germany),as well as some of the major musicconcerts held in Spain – San Isidro inMadrid, and the Pilar in Zaragoza; it wasalso behind the online concert platformeMe (Event Music Experience).SEAT also raised its profile by beingpresent in events organized in thebusiness and institutional worlds. Someof the highlights under this headingwere participation in the ‘Spain Today:Living and Innovating’ salon, held inMoscow, or else the ‘Smart City Expo’held in Barcelona. The brand was also thesupplier of official cars for other eventssuch as the ‘080 Barcelona Fashion’design show, the ‘International FilmFestival of Catalonia’ held at Sitges, andthe CSIO 2011, the international horsejumpingshow organized by Barcelona’sRoyal Polo Club.SEAT, UEFA Europa League official sponsor.54 | Annual Report 2011 | Commercial Activity


SEAT continues to support the best music.Sports and music.Music and sports.The brand’s identityprofile was also raisedexponentially viasponsorship such asthe UEFA Europa Leagueas well as some of themajor music concertsheld in Spain.Commercial Activity | Annual Report 2011 | 55


SEAT RANGESEAT offers anentire rangeof models,in a perfectcombinationof design andtechnology.SEAT MiiThe SEAT Mii is the smart choice for modernurban mobility: it melds innovativetechnology with compellingdesign and lowemissions.56 | Annual Report 2011 | Commercial Activity


SEAT IBIZAThe SEAT Ibiza is the best expression wherebeauty and technology come together,a balanced representative ofour values.SEAT IBIZA SCThe SEAT Ibiza SC has the most attractive andmodern design with technologicalsubstance.Commercial Activity | Annual Report 2011 | 57


SEAT IBIZA STThe Ibiza ST adds functionality toan outstanding design.SEAT ALTEAThe SEAT Altea, the spacious segmentA model, filled up with advancedtechnology and wrapped ina unique design.58 | Annual Report 2011 | Commercial Activity


SEAT ALTEA XLThe SEAT Altea XL is the family friendlymodel with more space due to itsamazing roominess andboot capacity.SEAT ALTEA FREETRACKThe SEAT Altea Freetrack is the perfectcombination of functionality,adventure and style.Commercial Activity | Annual Report 2011 | 59


SEAT LEÓNThe SEAT León stands for top design.It proves its leading positionin terms of performance.SEAT EXEOThe SEAT Exeo represents the smart choiceshowing the elegance of the cartogether with its excellentquality and technology.60 | Annual Report 2011 | Commercial Activity


62 | Annual Report 2011 | Brand and ProductBrand andProduct


The brand’s values – Design Driven,Dynamic, Young Spirited, Reliable, Efficientand Accesible – are reflected in its models,the organisation itself as well as the peoplewho make it up. The development of thecars, the dynamism of the company, and itsexcellence in management were rewardedthroughout the year with numerous prizesand awards, both in the national andinternational press.MODELS/ ‘MPV of the Year’ for the Alhambra inPortugal. Awarded by the jury membersof the ‘Car of the Year – Glass SteeringWheel Trophy’. A success that highlightsits quality, flexibility, magnificent valuefor money in terms of equipment, makingit a benchmark vehicle for its segment.SEAT models have been awarded thisaccolade for the third year in a row. In2009 the Ibiza was chosen as ‘Small Car ofthe Year’, and in 2010 the Ibiza Cupra wasdistinguished as ‘Sports Car of the Year’./ ‘Best imported MPV for 2011’, for theAlhambra in Germany. Awarded by theauto motor und sport magazine at the35 th edition of the ‘Best Cars’ gala./ ‘Auto Trophy’ for the Alhambra inGermany. Awarded by the Auto Zeitungmagazine in the category of importedMPVs./ ‘Best MPV on the market’ for theAlhambra in the UK. Awarded by theBritish publication What Car?, for itsdesign as the ideal MPV./ ‘Best MPV’ for the Alhambra in the UK.Chosen by Fleet World magazine at itsannual awards./ ‘Best MPV’ for the Alhambra in the UK.Awarded by Diesel Car, a publicationspecialising in diesel and eco-friendlyvehicles, thereby acknowledging thehigh efficiency levels of the Alhambra’sengine range./ ‘Best MPV’ for the Alhambra in Spain.Awarded by the El Economista daily atthe 2 nd edition of the Ecomotor awardspresented at the Barcelona Motor Show./ ‘Best concept car’ for the IBL at theGuangzhou Motor Show. The first awardreceived by SEAT in China. Given by theorganizing committee and readers/listeners of four Chinese media outlets.SEAT Ibiza COPA, ahead of the field.Brand and Product | Annual Report 2011 | 63


COMPANY/ ‘Contribution to environmental sustainabilityaward’ for the Cenit VERDE project,headed by SEAT. Awarded by themagazine Capital, in recognition of thebenefits to the environment providedby the development of the eco-friendlyvehicle.The ‘Capital Madrid’ awards are givento the ten best initiatives, projects orcompanies which contribute to Spain’scapital maintaining and improvingstandards of quality of life such ashealth and well-being, a commitment toculture and sports, and environmentalsustainability.This innovative project, under theaegis of Spain’s Ministry of Scienceand Innovation, aims to develop keytechnologies and components for thefuture manufacture and marketing ofeco-friendly vehicles – mainly plug-inhybrids and electric – in Spain./ ‘Award for the best initiative in CorporateSocial Responsibility’ for the ‘SEAT in theSun’ photovoltaic project, as an exampleof commitment to renewables. Awardedby El Vigía, a publication specialising inlogistics and transport.The award jury also acknowledgedthe sustainability of SEAT’s logisticsoperations, where railway transport forgoods and vehicles took pride of place./ Special award from Odette Internationalto SEAT’s Department of Current Accountsand Invoicing for its contribution to theProject on e-Invoicing in Europe. Givenat the Odette International Awards 2011.This project, under the aegis of theOrganization for Data Exchange byTele-Transmission in Europe over thepast three years, concluded with thepublication of a recommendation one-invoicing in Europe.The dynamismof the company,and its excellencein managementwere rewardedthroughout theyear with numerousprizes and awards,both in the nationaland internationalpress.64 | Annual Report 2011 | Brand and Product


Copa versions of Ibiza SC, León and Altea XL.MANAGEMENT/ ‘Executive of the Year’ in Catalonia forJames Muir, Chairman of SEAT’s ExecutiveCommittee. Awarded by the publicationEjecutivos at the second edition ofthese prestigious awards. The juryacknowledged the dedication, experienceand good business practices of JamesMuir at the head of the company./ ‘Rising Star’ award for Xavier Ros, SEAT’sHead of Personnel. Awarded by themagazine Automotive News Europe, forbeing one of the highest-profile managersin the field of human resources in theEuropean automotive sector.Cupra R version, the ultimate expression of sportiness.Brand and Product | Annual Report 2011 | 65


Research andDevelopmentINNOVATIONSEAT’s Technical Centre (CTS), locatedat the Martorell facility, makes SEAT theonly Spanish car manufacturer with thefull-range capacity to design, develop,manufacture and distribute its ownvehicles in an integrated fashion. Theactivity carried out at this benchmarkcentre in the field of R&D strengthensthe brand even further, while at the sametime making SEAT the most importantindustrial investor in R&D+i in Spain.The CTS staff put all their creativity andinnovative capacity to work in the continuousimprovement of development processes.The launch of the Mii in November 2011marked the beginning the greatest productoffensive in the history of SEAT, whose newDNA is visible in the latest concept cars – theIBE (urban sports coupé), IBX (crossover)and the IBL (saloon).An illustration of the effort and workput in throughout the year can be seenin the 280 projects developed. Anefficient technical effort reflected in thefollowing figures: 2,500 simulations,60 prototypes, 2 motor show vehicles(IBX and IBL), 2.5 million kilometres oflengthy test drives in 17 countries, anda total of 110 registrations, 83 fordesign models, and 27 for utility modelsand patents.The continuous flexibility and capacity ofthe CTS enable SEAT to head innovativeprojects in the field of electric motoring,such as Cenit VERDE, which brings together16 companies from different industrialsectors and 13 research centres. Projectdevelopments in the fields of design andcomponents mean that a demonstrationplug-in hybrid vehicle will be availablein 2012. Also, new strategies are beinginvestigated so as to minimise consumptionand provide communication protocolsfor recharging operations. In conjunctionwith electrical utility companies, a studyis being carried out to see the feasibility ofthe connection en masse of these vehiclesto the national power grid, together withnew services to be offered in the future.SEAT already has a plug-in hybrid vehicle– the León TwinDrive – and the first units ofthe Altea XL Electric Ecomotive, a full electricvehicle with a range of approximately135 kilometres. By manufacturing thesemodels, we acquire greater know-howin both technologies – hybrid and fullelectric. In this same vein, throughout2012 a pilot project will be rolled out,involving the supply of these vehiclesto private companies and governmentalorganisations, so as to get as muchinformation as possible from the end-userand see reactions to new technologies.Also, an agreement with Ficosa and SanyoIBL concept car, a dynamic and sporty saloon.66 | Annual Report 2011 | Research and Development


SEAT León TwinDrive and Altea XL Electric Ecomotive.has been reached to boost the developmentof high-voltage batteries, together with anaccord with Endesa to develop electricmotoring in Spain.There have been significant developmentstoo in the area of facilities, with the openingof a laboratory for high- and low-voltagebatteries. State-of-the-art equipmentenables experiments to be carried out withbatteries up to 150 kW of power for futureelectric vehicles. The laboratory is alsoaccredited to certify low-voltage batteriesfor the Volkswagen Group.February 2011 saw the official conclusionof the MARTA project – Motion andAutomobility with Advanced TransportNetworks – in which the CTS has playedan active part over the past four years.At the final presentation of the project, apractical demonstration of the applicationsdeveloped was carried out on SEAT cars –covering between-car communication orcommunication with infrastructure (trafficlights) to minimise the risk of collisions atcrossroads or during overtaking.IBX concept car, crossover between a SUV and sports coupé.IBE concept car, an urban sporty coupé.Research and Development | Annual Report 2011 | 67


Alejandro Mesonero-Romanos, SEAT’s new head of design.SEAT’s TechnicalCentre (CTS)makes SEAT theonly Spanish carmanufacturerwith the fullrangecapacity todesign, develop,manufacture anddistribute its ownvehicles in anintegrated fashion.TRAININGThe CTS’s work in training and outreachis closely linked to the sphere in which itdevelops its R&D+i work. In 2011, therewas a very intense relationship withuniversities since it participated in diversetechnological forums through talks andconferences. Noteworthy among thevarious initiatives was organisation of theAula SEAT at Barcelona’s Sarrià ChemistryInstitute (IQS) and at the University ofNavarre at Pamplona (the aim being todescribe to engineering students theentire integrated vehicle developmentprocess), and participation in the‘Innovation Quest’ at the ESADE BusinessSchool, where students of differentnationalities proposed innovations for theSEAT Ibiza.The ‘SEAT Chair in Management ofInnovation and Sustainable Design inthe Automotive Sector’ continued at fullthrottle with its organisation of diverseactivities such as the postgraduatecourses ELTICA (car electronics) andCARMAT (bodywork and materials), the CarDiploma at the Terrassa Higher TechnicalCollege of Engineering, as well as theaward of the ‘SEAT prize’ to the best endof-degreeproject in the automotive sector.Throughout the year more than 70 internsworked at the CTS, and another 6 PhDstudents are working on their doctorateswithin research projects at the Centre.COMPETITIONThe CTS also provides full technologicalsupport to the SEAT Sport sports division,as well as to all León drivers wishing toparticipate in the WTCC, the SEAT LeónSupercopa (Germany, France and Mexico),the brand-new Ibiza SC Trophy, as wellas other circuit speed and endurancechampionships. Overall victory at theRussian Touring Car Championships (RTCC)and the Spanish Mountain Championshiponce more demonstrates the technicalsuperiority and competitiveness of theSEAT León Supercopa.68 | Annual Report 2011 | Research and Development


IBL concept car, design in evolution.Research and Development | Annual Report 2011 | 69


HumanResourcesSEAT’s priority has always been caringfor the interests of and motivating itsemployees, as well as facilitating theirself-development. Therefore, all activitiesthroughout 2011 were undertaken withthe unequivocal purpose of fulfilling thismission.CONTRACTS ANDSELECTION PROCESSSpain was particularly hard hit bythe world-wide economic crisis. Theautomotive sector – as were others – wasseriously harmed by the shrinkage ofthe car market deriving from the drop inproduction and sales volumes.Manufacture of the new Audi Q3 at theMartorell production facility generated1,500 jobs in the company – 700 of whichwere newly-created, in addition to thealready-existing 800. Also, in order to hireprospective candidates, for the first timeever the company, in collaboration withthe Catalan government (Generalitat) andthe Catalan Employment Bureau (SOC)undertook a pioneering selection process.Successful candidates were chosen fromamong the 1,200 candidates who hadpreviously enrolled on a specially-designedqualified training programme lasting176 hours. The course programme wasbased essentially on a cross-cutting skillsapproach (teamwork, quality, preventionof accidents at work and automotion),as well as an introduction to the SEATProduction System (Lean Manufacturingplus assembly, bodywork and paintingskills), in addition to work-station-specifictraining.Also on the recruitment front, last yearmodifications and improvements were madeto the selection process for higher-qualifiedemployees. The company set up a totalnumber of 79 external Assessment Centers(AC) to select 131 new workers for thedifferent company areas. Each of these ACs(pass rate in excess of 60%) had an averagenumber of 7 candidates chosen from a totalnumber of 25,530 job applications.Basic Workforce at December 3110,36910,35411,3942009 2010 2011SEAT range: Altea.70 | Annual Report 2011 | Human Resources


SEAT – one of Spain’s major creators of employment.BASIC WORKFORCE BY CENTRES AT DECEMBER 31VARIATION2011 2010 ABSOLUTE %Martorell 10,129 9,101 1,028 11.3Plant 7,382 6,715 667 9.9Spare Parts Centre 298 301 (3) (1.0)Administrative areas 2,449 2,085 364 17.5Zona Franca 1,223 1,220 3 0.2Plant 1,131 1,116 15 1.3Administrative areas 92 104 (12) (11.5)Other centres 42 33 9 27.3Total workforce * 11,394 10,354 1,040 10.0* Figures for 2011 and 2010 do not include 5 and 372 employees in partial retirement, respectively.Martorell’s assembly workshop 9.COLLECTIVE AGREEMENTOne of the most outstanding achievementslast year was bringing the 18 th CollectiveAgreement – a linchpin in the company’sstrategy as well as its future – to asuccessful conclusion.This new five-year Agreement provides forgreater flexibility, enabling the company toassure the production established for itsproduct offensive and market expansion,as well as react rapidly to customerneeds. By virtue of the agreement, theproduction facility will remain operationalup to a maximum of 328 days a year. Thiswill allow SEAT not only to increase itscompetitiveness within the VolkswagenGroup, but will also contribute to thecompany’s strategy to saturate productioncapacity at the Martorell facility, therebyopening a window of opportunity for thecreation of new jobs.Additionally, as is the case with otherConsortium brands, employees willbe able to share in the company’ssuccesses thanks to a system of variableremuneration. Thus, if the forecastoperating result is negative, employeescould get an additional remunerationof as much as 0.5% of their yearlyearnings, depending on improvementsover forecasts. On the other hand, if theoperating result is positive, the workforcewould receive an additional remunerationcomplement if targets concerningoperating results, productivity and qualitywere successfully reached.Human Resources | Annual Report 2011 | 71


By hiring morethan 1,300new employeesthroughout 2011,SEAT becameone of Spain’smajor creators ofemployment.JOB VACANCY POOLAnother major initiative promoted throughoutlast year was the Job Vacancy Pool. Thisnew on-line tool, which saw its officialstart-up in July, aims to encouragepersonal development and increaseemployees’ motivation, provide allemployees with information concerningin-house job vacancies and expeditethe process for access to them. Over thepast six months the Job Vacancy Pool hasadvertised 87 vacancies, with more than750 employees showing interest andsubmitting applications.MEDICAL SERVICESAND DINING-ROOMSSEAT believes that health, safety and wellbeingof its employees are overarchingpriorities, in addition to being keyelements in achieving efficiency andmotivation of the workforce. For thisreason, throughout 2011 the companyput in place a raft of reforms designed toimprove facilities in its medical servicesand dining-rooms.In the sphere of health and safety at work,the go-ahead was given to an improvementSEAT employees during trip to Audi Ingolstadt.72 | Annual Report 2011 | Human Resources


scheme based on three aspects. Firstly,improvements in the infrastructure of themedical services, enabling renovation,expansion and optimisation of the currentfacilities. Secondly, the acquisition ofmedical equipment and IT. And thirdly, thehiring of highly-qualified medical staff soas to provide employees using the servicewith the best possible attention.Still within this framework of improvedworking conditions for employees,another scheme was initiated – to becarried out over the next four years – torenovate all company dining-rooms.Youth and experience, a perfect combination.SEAT promotes employees’ professional development.Human Resources | Annual Report 2011 | 73


Corporate SocialResponsibilityEcomotive versions of Ibiza,Ibiza ST and León.SEAT devotes all its efforts to driving forwardthe sustainable development of its activitiesso that it is both profitable while at the sametime goes deeper into its commitment toenvironmental protection, social progressand transparency in its actions.ENVIRONMENTTwo of the main thrusts of the company’senvironmental management policythroughout 2011 were the implementationof an energy management system andmeasures aimed at improving energyefficiency and savings.The production facilities at Martorelland the Zona Franca, the SEAT TechnicalCentre (CTS) and the SEAT Original SpareParts Centre (CROS) were all awardedcertificates for their energy managementin compliance with standards ISO 50.001and UNE 16.001. SEAT thus consolidatesits leadership position in environmentalprotection in Spain, being the first Spanishcompany to be awarded the new certificatein compliance with standard ISO 50.001.It has also integrated energy managementinto its environmental management system,covered too by ISO 14.001 certification.The company continued to takeforward diverse initiatives reflecting itscommitment to reducing the environmentalimpact of its activities. Among themwas the transformation of the heat-and-74 | Annual Report 2011 | Corporate Social Responsibility


power generating plant at Martorell intoa plant that is much more efficient inthe production of power and heat, whileachieving a significant reduction in NOxand CO 2emissions. There were othernotable concurrent measures such ascontrol of facility consumption and energyvia the ENERGEST system, permittingmonitoring and optimisation of energyconsumption.Progress was also achieved in the ‘SEATin the Sun’ photovoltaic project for theproduction of clean emissions-freeelectricity. Throughout the year, 20,000photovoltaic panels were installed with apower output of 4 MW, providing a totaloutput of 5.6 million kWh per year. Thesewere in addition to the 20,000 panelsalready installed in 2010, to reach a totalpower output of 8 MW. Once completed,‘SEAT in the Sun’ will be one of the mostimportant rooftop photovoltaic facilitiesin the world, with a total output of 10.6MW, the equivalent of eliminating 6,200tonnes of CO 2per year.Environmental protection is a priority forthe company from the very beginning ofthe design stage, right through to productdevelopment in the Technical Centre.One important line of work centres onresearch into new measures to reduceCO 2emissions in vehicles. To this end,aerodynamics is constantly improved,latest-generation low-consumption enginesare developed, and a commitment is madeto alternative propulsion methods as canbe seen in the launch of the Ibiza 1.6 BifuelEU5 (3 and 5 doors) which runs on liquefiedpetroleum gas (LPG). The range of lowemissionmodels (Ecomotive and LPG), plusgood market reception in Europe meantconsiderable savings of CO 2emissions ofthe order of 3% in 2011 (and 13% over thepast 3 years) in our fleet of vehicles in EU27.Within the field of electric motoring,special mention should be made of theLeón TwinDrive (the first plug-in hybriddeveloped in Spain) and the Altea XLElectric Ecomotive (the first full Spanishelectric car presented to the national andinternational press in November). The firstmodels to be equipped with these newtechnologies will be launched in 2015 and2016 respectively.The production facilities at Martorell andthe Zona Franca, the SEAT Technical Centreand the SEAT Original Spare Parts Centrewere all awarded certificates for their energymanagement in compliance with standards ISO50.001 and UNE 16.001. SEAT thus consolidatesits leadership position in environmentalprotection in Spain, being the first Spanishcompany to be awarded the new certificate incompliance with standard ISO 50.001.‘SEAT in the Sun’, the Martorell photovoltaic facility.Corporate Social Responsibility | Annual Report 2011 | 75


SOCIAL ENVIRONMENTPart of SEAT’s social policy is to enableemployees to reconcile their professionaland family lives, as well as meet theirneeds. Likewise, its approach to genderequality has placed SEAT at the head of theautomotive sector as regards the numberof women in its workforce. Meeting theneeds of disadvantaged workers is yetanother concern of the company. For itswork in these fields in 2011 the companywon the Excellence in Diversity certificate,awarded by the Seeliger and CondeFoundation.For a company with such a social impact,opening the doors of its facilities is muchmore than something done out of a senseof duty. In 2011 more than 11,000 studentsfrom universities, vocational trainingcolleges, as well as other individualsinterested in the company visitedMartorell. Other personalities who madethe trip to our production centre includedFrancesc Xavier Mena, Catalan ministerfor Business and Employment, AndreuMas-Colell, Catalan minister for Economyand Knowledge, MEPs from the EuropeanParliament’s Transport Commission, adelegation from the Spanish Ministry ofPublic Works, and Eugenia Bieto, GeneralManager of ESADE Business School.Throughout the year SEAT also droveforward other initiatives in the sphere ofcorporative social responsibility, suchas its renewal of the SEAT Chair at thePolytechnic University of Catalonia (UPC).It also continued to participate actively indifferent institutions by contributing itsknow-how so as to broaden the knowledgebase, in recognition of which RamónParedes – Vice-president for Governmentaland Insititutional Relations for SEAT andthe Volkswagen Group in Spain – waselected President of the ‘BCN VocationalTraining Foundation’. Also noteworthy wasits collaboration in the second edition ofthe ‘Formula Student’ in Spain, a sportscompetition pitting young engineersfrom different European countries againsteach other in the design, development,construction and driving of a single-seaterracing car.In 2011 SEAT organized a whole raft ofactivities revolving around its relationwith its employees. Some of the morenoteworthy initiatives were the ‘SEAT day atBarcelona Zoo’, for the youngest membersof employees’ families; a drawingcompetition entitled ‘Live Christmas atSEAT’ was also organized for employees’children and grandchildren.Employees were also given an opportunityto show their literary skills with the SantJordi micro-story competition, held onApril 23 rd , the day of traditional Catalanfestivities as well as the International Dayof the Book.In the field of sport, yet another yearworkers played in rival teams for the SEATSEAT Cup Tournament, 5 th edition.76 | Annual Report 2011 | Corporate Social Responsibility


football Cup (this year in its 5 th edition);and again for a second year running, apaddle tennis competition was organized.In 2011 the company also acknowledgedthose employees who, expressing theirpassion for the brand, sold most carsamongst family members.Employees were duly informed of all theseactivities by means of the weekly bulletin‘SEAT hoy’, the monographic publication‘SEAT hoy Especial’ and the e-newsletter‘SEAT hoy ÚLTIMA HORA’. The ‘mundoSEAT’magazine and the company intranet werealso used as channels to disseminatenews of the diverse initiatives.The Spanish Red Cross acquires 76 SEAT Ibiza STs.Tribute to retired SEAT employees.‘Formula Student’ university competition, 2 nd edition.‘SEAT day’ at Barcelona Zoo.The mundoSEAT magazine is into its 75 th edition.Corporate Social Responsibility | Annual Report 2011 | 77


With a view to layingthe foundationsfor sustainabledevelopment, SEATis committed tostrengthening its riskcontrol system.GOVERNANCE, RISKAND COMPLIANCESEAT’s business activities in a global,dynamic and competitive market entailboth risks and opportunities. With a viewto laying the foundations for sustainabledevelopment, SEAT is committed tostrengthening its risk control system.Using this proactive approach, thecompany responds in a responsible wayto the challenges of growth, transparencyand sustainability.In 2011 the company set up a specific areawithin its general activities, denominated‘Governance, Risk and Compliance’ (GRC),whose overarching aim is to pinpointpotential risks at a very early stage so asto bring in measures to help eliminateor mitigate those risks, while at thesame time guaranteeing compliancewith both external and internal rules andregulations. The risk management systemforms part of the larger sphere of theVolkswagen Group strategy.The underlying purpose of this systemis to increase transparency, make for amore effective risk management approachwhich helps in guaranteeing stability inour business model. Both the ExecutiveCommittee of SEAT and the Board ofDirectors are provided with a regularupdate from the GRC area on risk analysisand compliance. The process makes forease of correct decision-making by themanagement bodies so as to successfullyachieve strategic targets by aligning aims,risks and controls.The GRC area is located within Finance,and comprises two departments – RiskManagement and Internal Control, plusCompliance. It reports directly to theChairman of SEAT’s Executive Committeeand the Vice-president of Finance andOrganization.SEAT regularly revises risks deriving from its activity.78 | Annual Report 2011 | Corporate Social Responsibility


RISK DETECTION AND ASSESSMENTSEATRISKMANAGEMENTRISK REPORTMITIGATION AND CONTROL MEASURESRisk Management and Internal ControlThe Risk Management department isdesigned to pinpoint potential risksearly on and operates in an integratedfashion on the day-to-day processes ofthe company.Potential risks are reviewed, identifiedand documented periodically and incoordination with the other areas. Theanalysis process takes into account thelikelihood of the risks actually happeningand the scope of the potential damage,both material and immaterial – especiallyloss of reputation, legal repercussions orelse those impacting on strategy.The risk management system guaranteesthe implementation of mitigation measures,as well as the setting up of controls for thosemeasures to be properly applied.A systematic analysis of controleffectiveness and compliance is carriedout with a view to achieving stability andreliability of the controls put in place. Ata later stage the best risk-managementpractices and methodologies are analysedand documented, and work is then doneto standardize them across all processes.This management system enablesthe production of reports providing aclear and faithful picture of the currentsituation, an update of which is regularlysent to the Executive Committee and theBoard of Directors of SEAT. Additionally,the information gathered is alsointegrated into the Volkswagen Group’srisk management system.The risk-management team works inclose collaboration with the Compliancedepartment so as to detect possibleviolations of rules, regulations and norms,as well as providing support in the settingup of measures and processes aimed atenforcement.ComplianceThe remit of the Compliance departmentis continuous oversight, supervisionand management of both nationaland international legal requirements,in addition to enforcing SEAT andVolkswagen Group norms.The constantly-changing legal framework– embracing environmental, economic,fiscal, data protection, and laboursafety regulations – has a direct impacton numerous areas of the company’sactivities.In cooperation with the legal departmentand those areas affected, programmesare set up so as to guarantee compliancewith the pertinent rules and regulations.Any negative effects on the good nameof the company, financial losses, fines orcompensation issues are thus effectivelyavoided.Both the Executive Committee and theBoard of Directors of SEAT are fully awareof the added value accruing from goodcorporative practices. For this reason, bothbodies are provided with a regular updateof the relevant changes in regulations andnorms, as well as the implementationof plans of compliance and degree ofobservance of the regulations.In 2011, SEAT introduced a Code ofConduct, in line with the VolkswagenGroup’s compliance strategy as well asCorporate Social Responsibility | Annual Report 2011 | 79


SEAT provides a responsible response to challenges of growth, transparency and sustainability./ ICT. Due to the major role played bytechnology in the day-to-day operationsof the company, SEAT is developingsecurity policies concerning access toconfidential data as well as measuresto prevent systems failures which mighthamper ordinary operability.CODEOFCONDUCTOFTHESEATGROUPIn 2011, SEATintroduced a Codeof Conduct, in linewith the VolkswagenGroup’s compliancestrategy as well as theprinciples of the OECD.All employees were informed of the Code of Conduct.Corporate Social Responsibility | Annual Report 2011 | 81


FinancialActivitySEAT Exeo, perfect fusion between work and leisure.82 | Annual Report 2011 | Financial Activity


SEAT range: León.ECONOMIC ENVIRONMENT2011 was a year of widespread worldeconomic turmoil. The effects of thenatural disaster in Japan on worldproduction chains, and a worsening ofthe sovereign debt crisis in the Eurozoneentailed an additional deterioration ofthe economic and financial situation,particularly in Spain. As the year wore on,the Spanish economy gradually ran outof steam, with a weakening of the slightupturn seen in the first two quarters.An acceleration of the drop in domesticdemand, due to plummeting consumption,was only partially compensated for bydemand from export markets. At the sametime, a worsening of the credit situationfor banks on international markets wasreflected in an increase in interest rates ofthe very few loans granted to companiesand families.In such adverse conditions, the Spanishcar industry reduced its productionlevels as compared to the previous year.Moreover, it was unable to off-load itsproduction on the Spanish market due tothe drop in demand for cars and the creditsqueeze.The gravity of the situation was seen inthe significant downturn (in the region of18%) in the number of car and off-roadvehicle registrations in Spain. Thus, thejust over 808,000 eventual registrationsat the end of 2011 are equivalent to a50% drop in the market against 2007, andthe worst sales figures for the Spanishautomotive sector since 1993.In spite of the difficult, ever-changing economicenvironment of 2011, SEAT was successful, for thesecond year running, in increasing net sales (8.3%),thanks to good results in its export markets. Exportsgrew by 23.5%, totalling 3,787.7 million euros.Financial Activity | Annual Report 2011 | 83


RESULTSIn spite of the difficult, ever-changingeconomic environment of 2011, SEAT wassuccessful, for the second year running,in increasing net sales (8.3%), thanksto good results in its export markets.Exports grew by 23.5%, totalling 3,787.7million euros.This increase in income and the gradualoptimisation of the commercial coststructure produced an improvement intrading results of 40.8% as compared tothe previous year.None the less, an increase in personnelcosts – due to growth of the labour force,as well high R&D and depreciation costsgenerated by the major boost given thedevelopment of new models to be launchedin 2012 and thereafter – acted as a brakeon improvements achieved, and meantthat the company ended the financial yearwith losses of 61.5 million euros.SEAT devotes major resources every yearso as to continuously develop its productsand modernize its processes, facilitiesand equipment.Investment activated throughout thefinancial year totaled 417.1 million euros.For its part, the operating cash flowimproved by 48.9% when compared to2010, and totaled 178.1 million euros,3.5% of net sales.PROCESSESAll company processes have either adirect or indirect impact on the financialand economic spheres. For this reason,the control of risks deriving from them,and on-going adaptation to consolidatesustainability of the brand are actions thathave become essential for managementof the company.Throughout 2011 significant advanceswere made in different areas, such as amore widespread use of the electronicinvoice, the internalization of IT(Information Technology) services whichhad thus far been outsourced, as wellas the creation of the new area of GRC(Governance, Risk and Compliance),whose remit is to exercise oversightconcerning the good governance ofthe company, risk management, andcompliance with standards.84 | Annual Report 2011 | Financial Activity


Net sales (millIons of euros)4,101.34,662.85,049.12009 2010 2011SEAT range: Ibiza SC.SEAT invests in continuous product improvements.Financial Activity | Annual Report 2011 | 85


SEAT, S.A. ANNUAL ACCOUNTS


AUDITORS’ REPORT 88BALANCE SHEET 90PROFIT AND LOSS STATEMENT 91STATEMENT OF CHANGESIN EQUITY 92CASH FLOW STATEMENT 94NOTES 96APPENDIX 1. EVOLUTIONOF NON-CURRENT ASSETS 122APPENDIX 2.SUBSIDIARY COMPANIES 126


88 | ANNUAL REPORT 2011 | AUDITORS’ REPORTAUDITORS’REPORT


AUDITORS’ REPORT | ANNUAL REPORT 2011 | 89


BALANCESHEETAt December 31(millions of euros)Assets Note 2011 2010Non-current assets 3,094.2 3,106.3Intangible assets 6b 576.3 571.9Tangible assets 6c 1,009.5 1,042.4Long-term Group companies investments 6d 1,106.1 1,113.9Long-term financial investments 1.7 1.8Deferred tax assets 18 400.6 376.3Current assets 1,037.1 741.7Non-current assets available for sale 1.4 0.0Inventories 9 364.7 279.6Trade receivables and others 10 554.2 386.7Short-term Group companies investments 11 116.8 67.1Short-term financial investments 11 0.0 7.0Short-term prepaid expenses 0.0 1.3Cash and cash equivalents 0.0 0.0Total 4,131.3 3,848.0Equity and liabilities Note 2011 2010Equity 671.8 736.0Shareholders’ equity 12 656.3 717.8Subventions 13 15.5 18.2Non-current liabilities 321.8 331.9Long-term provisions 14 194.6 198.4Long-term liabilities 15 93.1 91.4Long-term Group companies liabilities 15 2.5 3.0Deferred tax liabilities 18 30.2 39.1Long-term prepaid income 1.4 0.0Current liabilities 3,137.7 2,780.1Short-term provisions 14 594.5 468.8Short-term liabilities 15 55.2 78.7Short-term Group companies liabilities 15 1,052.3 742.9Trade payables and others 16 1,416.8 1,446.5Short-term prepaid income 18.9 43.2Total 4,131.3 3,848.090 | ANNUAL REPORT 2011 | BALANCE SHEET


PROFITAND LOSSSTATEMENTJanuary 1 to December 31 (millions of euros)Continuing operations Note 2011 2010Net sales 19a 5,049.1 4,662.8Change in inventories of finished goods and work in progress 19b 72.1 (16.7)Material, wages and overheads capitalized as assets 166.2 196.3Supplies 19c (3,959.0) (3,451.0)Other operating income 19d 586.8 410.5Personnel costs 19e (528.0) (459.7)Other operating expenses 19f (1,247.8) (1,351.0)Depreciation of fixed assets 6a (301.2) (307.7)Change of subventions from non-financial fixed assets and others 13 4.1 3.0Excess of provisions 68.6 24.8Impairment and result on disposal of fixed assets 6a (142.8) (41.3)Operating result (231.9) (330.0)Financial income 19g 111.1 34.9Financial expenses 19h (19.6) (24.6)Exchange rate differences 17 (7.5) 13.6Impairment and result on disposal of financial instruments 19i (6.3) 36.4Financial result 77.7 60.3Result before tax (154.2) (269.7)Corporation tax 18 92.7 165.8Result for year (61.5) (103.9)PROFIT AND LOSS STATEMENT | ANNUAL REPORT 2011 | 91


STATEMENTOF CHANGESIN EQUITYAt December 31 (millions of euros)Statement of recognised income and expenses Note 2011 2010A) Result of profit and loss statement (61.5) (103.9)For valuation of financial instruments 0.0 0.0Financial assets available for sale 0.0 0.0Other income/expenses 0.0 0.0For coverage of cash flow 0.0 0.0Subventions 13 0.3 9.5For actuarial gains and losses and other adjustments 0.0 0.0For non-current assets and linked liabilities,maintained for sale 0.0 0.0Conversion differences 0.0 0.0Taxation effect (0.1) (2.8)B) Total income and expenses entered directly to equity 0.2 6.7For valuation of financial instruments 0.0 0.0Financial assets available for sale 0.0 0.0Other income/expenses 0.0 0.0For coverage of cash flow 0.0 0.0Subventions 13 (4.1) (6.5)For non-current assets and linked liabilities,maintained for sale 0.0 0.0Conversion differences 0.0 0.0Taxation effect 1.2 1.9C) Total transfers to profit and loss statement (2.9) (4.6)D) Total recognised income and expenses (A+B+C) (64.2) (101.8)92 | ANNUAL REPORT 2011 | STATEMENT OF CHANGES IN EQUITY


Statement of total changesSubscribedcapitalSharepremiumReserve Profit/lossfrom prev.yearsProfit/lossfor yearSubventionsTotalFinal balance 2009 0.1 1,008.1 0.0 0.0 (186.5) 16.1 837.8Adjustments for changes of criterion 0.0 0.0 0.0 0.0 0.0 0.0 0.0Adjustments for errors 0.0 0.0 0.0 0.0 0.0 0.0 0.0Adjusted balance beginning 2010 0.1 1,008.1 0.0 0.0 (186.5) 16.1 837.8Total recognised income and expenses 0.0 0.0 0.0 0.0 (103.9) 2.1 (101.8)Operations with partners or owners 0.0 0.0 0.0 0.0 0.0 0.0 0.0Capital increase 0.0 0.0 0.0 0.0 0.0 0.0 0.0Capital reduction 0.0 0.0 0.0 0.0 0.0 0.0 0.0Conversion of financial liabilities intoequity 0.0 0.0 0.0 0.0 0.0 0.0 0.0Distribution of dividends 0.0 0.0 0.0 0.0 0.0 0.0 0.0Operations with own shares orparticipations (net) 0.0 0.0 0.0 0.0 0.0 0.0 0.0Variation in equity due to businesscombinations 0.0 0.0 0.0 0.0 0.0 0.0 0.0Other operations with partners orowners 0.0 0.0 0.0 0.0 0.0 0.0 0.0Other variations in equity 0.0 0.0 0.0 (186.5) 186.5 0.0 0.0Final balance 2010 0.1 1,008.1 0.0 (186.5) (103.9) 18.2 736.0Adjustments for changes of criterion 0.0 0.0 0.0 0.0 0.0 0.0 0.0Adjustments for errors 0.0 0.0 0.0 0.0 0.0 0.0 0.0Adjusted balance beginning 2011 0.1 1,008.1 0.0 (186.5) (103.9) 18.2 736.0Total recognised income and expenses 0.0 0.0 0.0 0.0 (61.5) (2.7) (64.2)Operations with partners or owners 0.0 0.0 0.0 0.0 0.0 0.0 0.0Capital increase 0.0 0.0 0.0 0.0 0.0 0.0 0.0Capital reduction 0.0 0.0 0.0 0.0 0.0 0.0 0.0Conversion of financial liabilities intoequity 0.0 0.0 0.0 0.0 0.0 0.0 0.0Distribution of dividends 0.0 0.0 0.0 0.0 0.0 0.0 0.0Operations with own shares orparticipations (net) 0.0 0.0 0.0 0.0 0.0 0.0 0.0Variation in equity due to businesscombinations 0.0 0.0 0.0 0.0 0.0 0.0 0.0Other operations with partners orowners 0.0 0.0 0.0 0.0 0.0 0.0 0.0Other variations in equity 0.0 0.0 0.0 (103.9) 103.9 0.0 0.0Final balance 2011 0.1 1,008.1 0.0 (290.4) (61.5) 15.5 671.8STATEMENT OF CHANGES IN EQUITY | ANNUAL REPORT 2011 | 93


CASHFLOWSTATEMENTJanuary 1 to December 31 (millions of euros)2011 2010A) Cash flow from operating activities 178.1 119.6Result before tax (154.2) (269.7)Adjustment of result 490.5 370.8Depreciation of fixed assets 301.2 307.7Valuation corrections due to impairment 111.6 (3.8)Variation of provisions 121.9 93.9Accounting entry of subventions (7.2) (9.7)Results of disposal of fixed assets 52.0 0.8Results of disposal of financial instruments 0.0 0.0Financial income (111.1) (34.9)Financial expenses 19.2 19.5Exchange rate differences 7.5 (13.6)Valuation at reasonable value in financial instruments 0.0 0.0Other income and expenses (4.6) 10.9Changes in current capital (251.5) 2.5Inventories (96.6) 25.7Receivables and others (147.7) (203.4)Other current assets 1.3 2.1Payables and others 14.5 179.0Other current liabilities (23.0) (0.9)Other non-current assets and liabilities 0.0 0.0Other cash flow in operating activities 93.3 16.0Payment of interests (17.3) (16.7)Collection of dividends 64.6 11.9Collection of interests 1.5 3.0Collection (payment) for corporation tax 44.5 17.8Other payments (collections) 0.0 0.0B) Cash flow from investment activities (439.8) (389.0)Payments for investment (441.8) (427.0)Group and associated companies (7.0) 0.0Intangible assets (203.9) (226.2)Tangible assets (230.5) (200.6)Other financial assets (0.4) (0.2)94 | ANNUAL REPORT 2011 | CASH FLOW STATEMENT


2011 2010Collection for disinvestments 2.0 38.0Group and associated companies 0.1 7.1Intangible assets 0.0 30.5Tangible assets 1.5 0.1Other financial assets 0.4 0.3C) Cash flow from financing activities 269.2 255.8Collection and payments for equity instruments 2.5 1.9Acquisition of own equity instruments 0.0 0.0Disposal of own equity instruments 0.0 0.0Subventions 2.5 1.9Collection and payments for financial liability instruments 266.7 253.9Issue 275.6 296.0Borrowing from credit institutions 0.0 0.0Borrowing from Group and associated companies 253.9 274.3Other liabilities 21.7 21.7Repayment and depreciation of (8.9) (42.1)Borrowing from credit institutions 0.0 0.0Borrowing from Group and associated companies 0.0 0.0Other liabilities (8.9) (42.1)Payments for dividends and remuneration of other equity instruments 0.0 0.0Dividends 0.0 0.0Remuneration of other equity instruments 0.0 0.0D) Effect of exchange rate variations (7.5) 13.6E) Net increase/decrease in cash or equivalents (A+B+C+D) 0.0 0.0Cash or equivalents at beginning of year 0.0 0.0Cash or equivalents at end of year 0.0 0.0CASH FLOW STATEMENT | ANNUAL REPORT 2011 | 95


NOTESFinancial year ending December 31, 20111. COMPANY ACTIVITYa) Registered offices and legal formSEAT, S.A. was legally constituted on May 9, 1950, and is currently included in the Barcelona Mercantile Register,Volume 23,662, Folio 1, Page B 56,855, CIF A-28049161. On June 7, 2006, the Ordinary Shareholders’ meetingchanged the company’s registered offices, with effect the same day, to its present site at: Autovía A2, Km 585(E-08760 Martorell).b) Business aim and activitiesThe company’s business aim is the manufacture and sale of cars, parts, spare parts, accessories and any othercomplementary or related services, including technical assistance and service. Through its subsidiaries SEAT alsoundertakes commercial sales and marketing activities.2. EXEMPTION FROM PRESENTING CONSOLIDATED ANNUAL ACCOUNTSThe General Shareholders’ Meeting, held on June 20, 1991, voted exemption of the companies making up theSEAT Group, pursuant to the terms of Article 43 of the Code of Commerce, from presenting Consolidated AnnualAccounts. In accordance with the provisions of the above-mentioned Article 43, SEAT, S.A. (Unipersonal Joint StockParent Company of the SEAT Group) is exempt from the obligation of presenting Consolidated Annual Accounts,as it is a wholly-owned subsidiary of Volkswagen International Finance N.V. (its sole shareholder, with registeredoffices in Amsterdam, Holland), and indirect subsidiary of VOLKSWAGEN AG (with registered offices in Wolfsburg,Germany); the pertinent financial statements, together with those of its subsidiaries, are included in those of theVolkswagen Group, of which VOLKSWAGEN AG is the parent company.From the aforementioned agreement, the Consolidated Annual Accounts of VOLKSWAGEN AG, as well as theConsolidated Management Report and the Group’s Auditors’ Report, are presented in their Spanish translationfor deposition at the Barcelona Mercantile Register.3. PRESENTATION BASIS OF ANNUAL ACCOUNTSa) True and faithful accountThe Annual Accounts are obtained from the company’s accounting records, which are expressed in euros, andprepared according to accounting principles generally accepted in Spain and established by current legislation.The Annual Accounts provide a true and faithful account of the company’s equity, its financial situation andresults, as well as an accurate picture of cash flow and changes in equity.b) Comparability of informationThe figures contained in the Annual Accounts are expressed in millions of euros.c) Grouping of headingsIn order to present the figures clearly, the headings are grouped together in the Balance Sheet and the Profit andLoss Statement and broken down in the Notes (Art. 256 of new Capital Company Law).96 | ANNUAL REPORT 2011 | NOTES


d) Items appearing under several headingsThere are some items whose amounts are shown under different headings of the Balance Sheet, due to theirbeing credits or liabilities whose collection arises in different financial years, with the items receivable or payablein the next year shown as short-term items, while amounts that will fall due in the forthcoming years are shownas long-term.4. APPLICATION OF RESULTSAt its meeting on February 15, 2012, the Board of Directors formulated a proposal to the General Shareholders’Meeting whereby losses incurred in 2011 (61.5 million euros) are administered to losses from previous years.In compliance with the new Capital Company Law, dividends which reduce the balance of reserves belowoutstanding balances for R&D expenses amortization may not be distributed.5. STANDARDS FOR RECORDING AND VALUATIONa) Intangible assetsThose specifically individualized development projects which present sound motives for technical success andeconomic-commercial profitability are activated as intangible assets. Those projects in force until 31.12.2007are depreciated lineally over a maximum period of five years. New projects as from 01.01.2008, by applying acriterion of homogenization with the policies of the Volkswagen Group, will be amortized according to their usefullife (see Appendix 1).Software is valued at acquisition price and cost is depreciated over a three-year period. Likewise, expenditurerelated to software maintenance is accounted for as such when incurred.When the book value of an asset is higher than its estimated realizable value, its net value is reduced immediatelyto its recoverable amount. Those assets subject to depreciation are submitted to loss tests due to impairment,provided that any event or change in circumstances indicate that the book value may not be recoverable. A lossdue to impairment is recognised by the excess of book value of the asset over its recoverable amount, the latterbeing understood as the fair value of the asset less the retail costs or value in use, whichever is the greater. Witha view to valuing losses due to impairment, assets are grouped together at the lowest level so as to provideseparately identifiable cash flow (cash generating units). Non-financial assets, distinct from goodwill, which areseen to have undergone loss due to impairment, are submitted to periodical reviews at each Balance Sheet datein case there have been possible reversions of the loss.The costs related to SEAT’s participation in the manufacturing of tooling needed for the production of shared parts for theplatforms of the Volkswagen Group, which incorporate the new models of the Group’s different brands, are shown underthis heading and will have a linear depreciation for a five-year maximum period from the date of the model’s launching.Financial costs (estimated at 3.4%) assigned to long-term projects involving R&D developments by Group companies arealso shown under this heading.Royal Decree Law 5/2004, regulating the trading system for greenhouse gas emission rights, was passed onAugust 27, 2004. Rights obtained for consideration are valued at acquisition price.NOTES | ANNUAL REPORT 2011 | 97


Rights received via the National Attribution Plan are valued at the beginning of the calendar year they correspondto, in line with a Group-wide uniform single policy.As gas emissions are generated, the company reflects the cost deriving from the obligation to return thecorresponding rights by establishing a ‘Short-term provisions’ item. The rights have been received gratis bythe company, so that the amount of the subsidy posted should be applied in a general nature, as emissionsassociated with rights received gratis are booked against costs.b) Tangible assetsTangible assets are valued at their acquisition price or production cost. Assets acquired before December 31,1983 were revalued in accordance with the provisions of Law 76/1961, Decree 12/1973, Law 1/1979, Law74/1980 and Law 9/1983.When an asset’s book value is greater than its estimated realizable value, its net value is reduced immediately toits recoverable value (see previous Note).Repair and maintenance expenses are posted as expenses when incurred. Expenses that represent an improvementor lengthening of the useful life of assets are capitalized and depreciated over the new estimated useful life.Depreciation is calculated using the straight-line method, based on the estimated useful life of the assets.c) LeasesI. When company is lesseeLeases of tangible assets in which the company substantially has all the risks and rewards deriving fromownership are classified as financial leases. They are capitalized at the beginning of the lease period at the fairvalue of the property leased or the current value of the minimum payments agreed for the lease, whichever is thelesser. The interest rate implicit in the contract is used to calculate current value; failing that, the company’s usualinterest rate in similar transactions is applied. Each lease payment is distributed between liabilities and financialcharges. Total financial charges are distributed over the duration of the lease operation and are booked to theProfit and Loss Statement of the financial year in which they accrue, applying the method of effective interest rate.The contingent quotas are costs of the financial year in which they are incurred. The corresponding obligations forthe lease operation, net of financial charges, are included under ‘Creditors for financial leasing’. The fixed assetsacquired under financial leases are depreciated during their useful life.Those leases in which the lessor maintains a substantial part of the risks and rewards deriving from ownershipare classified as operative leasings. Payments for operative leases (net of any incentive received from the lessor)are booked to the Profit and Loss Statement during the financial year when they accrue, on a straight-line basisfor the duration of the leasing period.II. When the company is lessorWhen assets are leased under operative leases, the asset is entered on the Balance Sheet in accordance with itsnature. Income deriving from leases is recognised on a straight-line basis for the duration of the lease operation.98 | ANNUAL REPORT 2011 | NOTES


d) Financial instrumentsI. Long-term investmentsFinancial investments are shown on the Balance Sheet at acquisition cost or put-in value. Where applicable,provisions are recorded for recognizing value depreciations deriving from negative development of subsidiarycompany’s equity. Capital increases with non-cash contributions in Group companies are valued at the amountresulting from the book value of the goods contributed.II. ReceivablesReceivables are recorded at their nominal value, less provision for insolvency and, for balances payable aftermore than 1 year, the necessary provision to show the current value of the debt. Receivables are classified asshort- or long-term depending on the maturity date on the Balance Sheet date. Those whose maturity datesfall within a twelve-month period after the end of the financial year are regarded as current; those beyondsaid period being regarded as non-current.III. Short-term investmentsShort-term investments are entered at nominal value.IV. LiabilitiesThese are posted at their current value. Liabilities are classified as short- or long-term depending on maturitydates at Balance Sheet date. Debts which fall due in the 12 months following the year-end are regarded ascurrent, and those in excess of this period as non-current.e) InventoriesInventories are valued at cost or net realizable value, whichever is less, the pertinent value corrections beingmade. The following methods are used to determine the cost of inventories:/ Raw materials: At acquisition cost, applying the FIFO method (first in, first out)./ Work in progress, vehicles and spare parts produced by the company: At raw material cost, according to themethod described previously, adding labour costs and other direct and indirect manufacturing expenses ofproduction./ Acquired spare parts: At acquisition cost as per invoice (plus customs, insurance and transport costs), applyingthe FIFO method.The vehicle fleet utilized by the company for its own use, whose useful life or sales period is considered lowerthan one year, is maintained within the year’s inventory and is not shown under tangible assets, registering thecorresponding valuation correction.Vehicles handed over to rental car companies with a purchase commitment are recorded in this section with thecorresponding depreciation applied.NOTES | ANNUAL REPORT 2011 | 99


f) SubventionsCapital subventions are posted to equity, at the amount granted when they are not repayable. These subventionsare transferred to results as a function of the depreciation of the assets associated to the subsidized projects. Fortheir part, non-repayable subventions related to specific costs are recognised on the Profit and Loss Statement inthe same financial year in which the corresponding costs accrue, with those granted to offset a business deficitbeing entered in the financial year in which they are granted, except when given to offset a business deficit infuture years, in which case they are entered during said financial years.g) Provisions and risksThe provisions include known risks at year-end, for the estimated value of such. Long-term provisions are shownat their present value.h) Foreign currency transactionsThe conversion into euros (functional currency) of the cost of fixed assets and inventory items whose originalvalue was expressed in foreign currency is conducted at the going exchange rate on the date of acquisition.Positive and negative differences which may arise between payables and receivables and their correspondingexchange rates in force on the closing date are entered in the Profit and Loss Statement in the year in which theyarise.i) Corporation taxThe company is subject to corporation tax under the consolidated tax regime, which includes all Group companiesthat fulfill the requirements demanded by the legislation in force.The Profit and Loss Statement includes as corporation tax income or expenses attributed to the company arisingfrom tax consolidation, calculated according to the criteria established for groups of companies with consolidatedtaxation (see Note 18).The expense (income) for taxes on profits is the amount that accrues under this item in the financial year, andwhich comprises both the expense (income) for current as well as deferred tax.Both the expense (income) for current and deferred taxes are recorded on the Profit and Loss Statement. Thisnotwithstanding, the tax effect related to items directly entered to equity is recognised on equity.Deferred taxes are recorded with the liability method, based on time differences arising between taxation basesof assets and liabilities and their book values.Deferred taxes are determined by application of the rules and tax rates approved or about to be approved at theBalance Sheet date, and which are expected to be applied when the corresponding asset due to deferred tax isrealized or when the liability due to deferred tax is paid.Assets due to deferred taxes are recognised insofar as it is probable that there will be future tax gains which canbe used to offset time differences.100 | ANNUAL REPORT 2011 | NOTES


j) Income and expensesIncome and expenses are posted when realized or incurred, for the reasonable value of the considerationreceived, and represent the amounts receivable or payable for goods delivered and services rendered, lessreturns, reductions, discounts and value added tax.k) Compensation for termination of contractCompensation for termination of contract is paid to employees as a result of the decision to terminate their labourcontract prior to the normal retirement age or when the employee voluntarily terminates their contract in exchangefor said compensation. The company recognises this compensation when it has committed itself demonstrably toterminating the contracts of employees in accordance with a formal detailed plan.l) Environmental expensesExpenses deriving from business activities aimed at protecting and improving the environment are posted asexpenses in the financial year in which they are incurred. Said expenses are posted at greater value of fixed assetswhen involving additions to tangible assets whose objective is minimizing environmental impact and protectingthe environment.m) Transactions with Group companiesAs a general rule, operations between Group companies are accounted for at the initial moment for their fair value.In the event that the agreed price is different from the fair value, the difference is recorded with consideration forthe economic reality of the operation. Later valuation is carried out in accordance with provisions in the applicablestandards.n) Non-current assets available for saleNon-current assets available for sale are valued at the moment of clasification at either book or reasonable value,whichever is the lower, after deduction of estimated sales costs.Included under this section is the wholly-owned subsidiary company SEAT Motor España, S.A. The Board ofDirectors of SEAT, S.A., at a meeting held on 11.11.11, decided to proceed to its sale to the Group companyVolkswagen-Audi Retail Spain, S.L. with effect from January 1, 2012 (see Appendix 2).6. NON-CURRENT ASSETSa) Evolution of non-current assetsMovements of the items included in non-current assets are detailed in Appendix 1 of these Notes.b) Intangible assetsCorrection due to impairment amounts to 45.1 million euros (39.1 in 2010). Said corrections are linked to theestimate of future sales volumes of the vehicles comprising the model range. The current value of the margin ofcontribution to sales during the life cycle of the models has been calculated on the basis of an annual discountrate of 6.8% (9.1% in 2010). The sum total of investments activated under R&D is acquired from Group companies.On November 2, 2007 the Spanish Cabinet approved the definitive individual assignment of emission rights forgreenhouse gases for 2008-2012. SEAT, S.A. was assigned 106,538 tonnes of CO 2for each year of the nationalplan.NOTES | ANNUAL REPORT 2011 | 101


The saleable value of this fixed asset amounts to 0.2 million euros (0.1 in 2010). The counterpart for assignationof these rights has been entered to equity under the section ‘Official capital subventions’. No rights-relatedacquisitions or disposals have been made during the financial year.During the year, 7.2 million euros (19.1 in 2010) corresponding to the use of tooling and technology of the Group,were capitalized under sub-section ‘Payments on account and intangible assets in progress’.The value of totally depreciated and in-use assets amounts to 750.9 million euros (644.3 in 2010).At the end of the financial year, the company has firm commitments for the purchase of goods to the amount of0.2 million euros (0.2 in 2010).The total amount of subventions received for R&D projects during the financial year totals 1.1 million euros (2.3in 2010), of which 0.1 million euros (0.5 in 2010) have been set aside for the acquisition of R&D assets, theremainder being posted to the Profit and Loss Statement.c) Tangible assetsThe estimated useful lives of the goods in tangible assets are as follows: buildings and other constructions,from 10 to 50 years; technical equipment and machinery, from 4 to 18 years; other facilities, tooling and officeequipment, and other assets, from 4 to 35 years.Correction due to impairment amounts to 45.7 million euros (1.4 in 2010). Said corrections are linked to the estimateof future sales volumes of vehicles in the model range. The current value of the margin of contribution to sales duringthe life cycle of the models has been calculated on the basis of an annual discount rate of 6.8% (9.1% in 2010).The section on land and buildings embraces the gross value of both in a single section. Of the total amount, 6%corresponds to land, and the remaining 94% to buildings.At year’s end, goods outside the operation are totally depreciated, the value of goods totally depreciated andstill in use amounting to 2,699.3 million euros (2,440.8 in 2010). Likewise, investment acquired from VWGroup companies amounted to 105.3 million euros (47.7 in 2010).The principal amounts of assets (listed according to origin, utilization and location) are as follows:2011 2010Millions of euros Gross Value Depreciation Gross Value DepreciationTangible assets acquired from VW Group companies 470.1 222.0 331.4 134.8Tangible assets used by VW Group companies 48.9 28.7 49.6 27.8Tangible assets used by non-Group suppliers 1,180.7 1,126.6 1,193.7 1,077.3Tangible assets placed abroad 99.5 91.6 94.7 75.1102 | ANNUAL REPORT 2011 | NOTES


The financial year results deriving from disposal of tangible assets totalled 1.5 million euros (-0.1 in 2010).The company has contracted various insurance policies to cover risks to which tangible assets are subject. The coverageof these policies is considered sufficient.At year’s end the company assumed firm commitments to purchase capital goods to the value of 278 million euros(170.6 in 2010).d) Long-term Group companies investmentsThe companies in which SEAT, S.A. has an investment of 20% or more in the share capital are listed in Appendix2 of these Notes. None of the companies is quoted on the Stock Exchange.7. LEASES AND OTHER SIMILAR OPERATIONSa) Financial leasesDetails of rights over goods under the system of financial leases included in the section ‘Land and Buildings’ oftangible assets is as follows:Millions of eurosLength ofcontract (years)CostPurchase optionvalueQuotas pendingpaymentCorporative building (02.02.05) 10 21.1 0.0 11.2Dining building (20.09.06) 10 2.0 0.0 1.2T-Systems building (20.09.06) 10 3.4 0.0 2.2SAT building (20.09.06) 10 5.2 0.0 3.3Peguform building (08.03.07) 7 3.7 0.0 1.9The current values of quotas pending payment are distributed by maturity date in the following way: 4.7 millioneuros in 2012, 14.9 million euros between 2013-2016, and 0.2 million euros during later years. The impact ofupdating said quotas amounts to 1.8 million euros.b) Operative leasesThe company also has operative leases. The amounts paid for rent to other Group companies or third parties,excluding those already mentioned in the previous paragraph, and comprising mainly information technology,land, buildings, fork-lift trucks, containers, fields and warehouses, total 12.6 million euros (12.5 in 2010).Rents received, mainly for buildings, fields and warehouses, amounted to 4.3 million euros (4.7 in 2010).Future amounts to be paid and received, in the event of early cancellation of contracts, are calculated not to besubstantially different from those in the present financial year.NOTES | ANNUAL REPORT 2011 | 103


8. FINANCIAL INSTRUMENTSa) Impact on financial situation and resultsI. Balance SheetThe categories of financial assets and liabilities appearing on the company’s Balance Sheet can be broken downthus:EquityinstrumentsBorrowingsecuritiesCredits,derivatives andothersMillions of euros 2011 2010 2011 2010 2011 2010Long-term financial assetsLoans and receivables 1,106.0 1,113.7 0.0 0.0 1.8 2.0Group companies investments (Note 6a) 1,106.0 1,113.7 0.0 0.0 0.1 0.2Financial investments (Note 6a) 0.0 0.0 0.0 0.0 1.7 1.8Short-term financial assetsLoans and receivables 0.0 0.0 0.0 0.0 671.0 460.8Trade receivables and others (Note 10) 0.0 0.0 0.0 0.0 554.2 386.7Group companies investments (Note 11) 0.0 0.0 0.0 0.0 116.8 67.1Financial investments (Note 11) 0.0 0.0 0.0 0.0 0.0 7.0Borrowing fromcredit institutionsBonds and othernegotiablesecuritiesDerivatives andothersMillions of euros 2011 2010 2011 2010 2011 2010Long-term financial liabilitiesDebts and other payables 0.0 0.0 0.0 0.0 95.6 94.4Group companies liabilities (Note 15) 0.0 0.0 0.0 0.0 2.5 3.0Third-party liabilities (Note 15) 0.0 0.0 0.0 0.0 93.1 91.4Short-term financial liabilitiesDebts and other payables 0.1 0.1 0.0 0.0 2,524.2 2.268.0Group companies liabilities (Note 15) 0.0 0.0 0.0 0.0 1,052.3 742.9Third-party liabilities (Note 15) 0.1 0.1 0.0 0.0 55.1 78.6Trade payables and others (Note 16) 0.0 0.0 0.0 0.0 1,416.8 1,446.5During the financial year no operations have been carried out with own shares.104 | ANNUAL REPORT 2011 | NOTES


II. Profit and Loss Statement and equityThe net amount of valuation corrections due to impairment for financial interests in Group companies at the endof the financial year totalled -6.3 million euros (49 in 2010).III. Other informationSEAT has formalized various commercial surety contracts jointly with the Centro Técnico de SEAT, S.A. (CTS) andSEAT Sport, S.A. to a maximum total amount of 114 million euros (101.3 in 2010), for the issue of guaranteescovering the refundable advances made by the Spanish Ministry of Science and Technology to the CTS. Likewise,the company is maintaining a line for the formalization of guarantee provision, jointly with other companieswithin the Group, covering the Spanish Ministry of Science and Technology for an amount of 59 million euros (47in 2010), and covering third parties to an amount of 30.1 million euros (9.1 in 2010).b) Nature and level of riskThe company’s activities are exposed to diverse financial risks: market risks (including exchange rates, interestrates and prices), as well as credit and liquidity risks. The company’s global risk management programme centreson managing the uncertainty of financial markets and aims to minimize potential adverse effects on financialprofitability.Risk management is under the purview of company Management, which identifies, assesses and covers financialrisks in accordance with the policies approved by the Board of Directors. The Board provides guidelines forglobal risk management, as well as for more specific areas such as exchange rate risk, interest rate risk, liquidityrisk, the use of derivatives and non-derivatives as well as investment of excess liquidity.I. Market riskExchange ratesAs an operator with global reach, the company is exposed to exchange rate risk via currency operations, especiallywith the US dollar, pound sterling, Swiss franc, Japanese yen, Polish zloty, Russian rouble, as well as Czech,Danish and Swedish crowns. The exchange rate risk emerges from future commercial transactions, recognisedassets and liabilities, and net investment in operations abroad. This notwithstanding, the risk is covered by theVW Group through centralization of foreign currency operations management.PriceThe company is not exposed to the risk of the price of securities since it does not include in its Balance Sheetinvestments held for sale or at a fair value with changes in the Profit and Loss Statement. The company limits itsrisk exposure to the price of commodities by participating in covering operations applied at a VW Group level soas to ensure the price of certain metals such as aluminium, copper and lead.Interest ratesSince the company does not possess any major remunerated assets, income and cash-flow from its businessactivities are substantially unaffected by changes in market interest rates.NOTES | ANNUAL REPORT 2011 | 105


II. Credit riskCredit risk arises out of cash and equivalents, deposits with banks and financial institutions, and clients. Withregard to banks and financial institutions, independent creditworthiness scales are used. If clients have beenassessed independently, the resulting scale is used; failing an independent creditworthiness check, credit controlassesses the client’s creditworthiness, taking into account the financial situation, previous experience and otherfactors. Individual credit limits are established on the basis of internal and external credit qualifications, withregular oversight of use of said limits.III. Liquidity riskPrecaution in the management of liquidity risk involves maintaining sufficient cash and negotiable securities aswell as financing availability via a sufficient amount of committed credit facilities. Management undertakes closescrutiny of forecasts of the company’s liquidity reserves on the basis of expected cash-flows.9. INVENTORIESMillions of euros 31.12.11 31.12.10Acquired products 68.5 65.8Raw materials and other supplies 69.3 56.7Work in progress and partly-finished goods 52.5 24.7Finished goods 174.4 132.4364.7 279.6At year’s end the impairment of inventory amounted to 92.1 million euros (80.6 in 2010), with provision for thefinancial year totalling 11.5 million euros (3.2 in 2010).The company maintains a commitment to purchase of part of cars sold to rental car companies (see Note 5e) tothe value of 21.8 million euros (41.1 in 2010).The company has taken out various insurance policies to cover risks to which inventories are exposed. Coverageprovided by these policies is deemed sufficient.106 | ANNUAL REPORT 2011 | NOTES


10. TRADE RECEIVABLES AND OTHERSMillions of euros 31.12.11 31.12.10Trade receivables 69.7 88.9Group companies receivables 239.8 191.0Other receivables 4.0 31.4Personnel 0.6 1.0Current tax assets 24.4 1.6Government bodies 215.7 72.8554.2 386.711. SHORT-TERM INVESTMENTSMillions of euros 31.12.11 31.12.10Group companies 116.8 67.1Loans 10.6 3.6Other financial assets 106.2 63.5Third-party 0.0 7.0Loans 0.0 7.0Other financial assets 0.0 0.0116.8 74.1The ‘Loans in Group companies’ section includes credits at current market interest rates, while ‘Other financialassets in Group companies’ includes the net value of balances generated on an annual basis by the tax assessmentbases of the Group companies subject to corporation tax under the consolidated tax regime applicable to SEAT(see Note 18).During the fiscal year the company has maintained loans and deposits with Group companies and creditinstitutions at a weighted average interest rate of 1.2% (0.9% in 2010).12. SHAREHOLDERS’ EQUITYThe breakdown and evolution of company equity may be found in the table showing the Statement of Changes inEquity (see page 93).NOTES | ANNUAL REPORT 2011 | 107


On February 25, 2010, the sole shareholder of SEAT, S.A., the German company Volkswagen AG, transferred itsparticipation (100%) in SEAT’s share capital to the Dutch company Volkswagen International Finance N.V.The share capital amounts to 120,200 euros which represents 20,000 shares at 6.01 euros per share, entirelysubscribed and disbursed by the sole shareholder Volkswagen International Finance N.V. Legal reserves totalling24,040 euros are totally provided for in compliance with current legislation.13. SUBVENTIONSNon-repayable capital subventions appearing on the Balance Sheet in the current section have been providedby central and autonomous governments for projects in production process improvement as well as new productdevelopment. Movement is as follows:Millions of euros 2011 2010Initial balance 18.2 16.1Addition 0.2 6.7Transferred to results (2.9) (4.6)End balance 15.5 18.2The company has also received operating subventions, basically to cover costs associated with R&D projects aswell as activities relating to training, commercial development and energy efficiency (see Note 19d).The total amount of operating subventions amounts to 3.1 million euros (6.7 in 2010).14. PROVISIONS AND RISKSMillions of eurosBalance01.01.11Addition2011Disposal2011Balance31.12.11Trade operations 247.2 125.2 (92.1) 280.3Personnel benefits 34.4 24.0 (21.7) 36.7Environmental activities 23.8 0.9 (4.3) 20.4Other provisions 361.8 234.7 (144.8) 451.7667.2 384.8 (262.9) 789.1At year’s end, the provisions amounted to 789.1 million euros, of which 194.6 million euros were long-term(updated to current market rate) and 594.5 million euros were short-term.The section ‘Trade operations’ includes mainly provisions for vehicle warranties. The estimated cost of warrantieshas been calculated on the basis of historic ratios held by the company on vehicles sold.108 | ANNUAL REPORT 2011 | NOTES


The section ‘Personnel benefits’ covers the part pending of provisions made to implement the personnel reductionplan agreed for 2007-2009 between the company and trade union representatives.In 2010 it also included provisions made to complement the monthly unemployment benefit payments for thoseworkers who had already been notified of their inclusion in the temporary Labour Force Adjustment Plan approvedby the Government, which provides for the following applicable measures: daily suspension of contracts of 700personnel on a rotational basis for a maximum period of 2 months per person, between January and June 2011, aswell as a working day reduction for 57 days to be applied to any of the production lines, thus daily affecting 2,350personnel on Line 1, as well as 2,250 personnel on Line 2, and 970 personnel on Line 3, between November 2010and June 2011.The estimated cost of the provisions has been obtained on the basis of the agreements reached in both rounds ofnegotiations.The section ‘Environmental activities’ includes those activities aimed at recycling vehicles based on the 2000European directive on end-of-life vehicles (see Note 20b), as well as those provided for concerning assignedemission rights for 2008-2012 (see Note 6b). The estimated cost for the provision of vehicle recycling has beenbased on two factors – the average useful life of vehicles per country and cost of scrapping. Provision for emissionrights is calculated on the basis of annual consumption of the same.The section ‘Other provisions’ covers basically provisions for production, legal and trading risks. The estimatedcost of these provisions has been based on the probable settlement of claims received.Calculations of provisions have been updated to a discount rate of 5% (4.5% in 2010).15. LIABILITIESMillions of euros 31.12.11 31.12.10Group companies 1,054.8 745.9Third-party 148.3 170.1Financial institutions 0.1 0.1Financial leasing 18.0 21.6Other financial liabilities 130.2 148.4Official loans with subventioned interest 90.8 82.1Bonds and deposits received 0.4 6.8Suppliers of fixed assets 39.0 59.51,203.1 916.0At year’s end liabilities amounted to 1,203.1 million euros, 1,054.8 million euros with Group companies (2.5long-term and 1,052.3 short-term), and 148.3 million euros with third parties (93.1 long-term and 55.2 shortterm).NOTES | ANNUAL REPORT 2011 | 109


Liabilities (mainly with Group companies and with official organizations at zero interest rate) are distributedaccording to maturity date as follows: 1,107.5 million euros in 2012, 38.8 million euros for 2013-2016 and 56.8million euros in later financial years.When granting a loan to the company financial institutions apply current market interest rates applicable at timeof authorisation. Likewise, interest rates applied to liabilities with Group companies are also subject to marketconditions.Credit lines granted to the company by Group companies totalled 1,000 million euros on December 31, 2011 of which675 million euros were used (1,000 and 430 respectively in 2010).16. TRADE PAYABLES AND OTHERSMillions of euros 31.12.11 31.12.10For third-party suppliers 681.2 701.3Purchases/services rendered with confirming 91.4 161.9Purchases/services rendered without confirming 589.8 539.4For Group companies suppliers 543.7 593.5Other payables 113.6 80.2Personnel (remunerations pending) 45.6 42.3Government bodies 32.7 29.21,416.8 1,446.5Payment periods to suppliers comply with limits established by Law 15/2010 of July 5, modifying Law 3/2004concerning late payments in commercial operations.Said law stipulates a limit for payment of 85 days for 2010 and 2011, 75 days for 2012, and 60 days from January 1,2013 onwards. At year’s end, payments made within the legally established time-frame totaled 5,545 million euros(4,963 in 2010) and the average weighted payment period to company suppliers was 46 days (61 days in 2010). Thereis currently no outstanding payment of major importance exceeding the legal limit.17. FOREIGN CURRENCYThe net value of balances in foreign currency totalled a credit balance of 13.7 million euros on December31, 2011 (credit balance of 3.5 million euros in 2010), held mainly in US dollar, pound sterling, Swiss franc,Japanese yen, Polish zloty, Russian rouble, as well as Czech, Danish and Swedish crowns. Of this total, 37 millioneuros correspond to favourable balances with Group companies and other suppliers, and 23.3 million euros tonegative balances with Group companies and other customers (30.3 and 26.8 respectively in 2010). The amountsattributed to income and expenses during the year amount to 11 and 18.5 million euros, respectively (24.2 and10.6 in 2010).110 | ANNUAL REPORT 2011 | NOTES


Amounts (in millions of euros) of the main transactions carried out in foreign currency are as follows:Millions of euros 2011 2010Purchases 70.7 74.1Sales 979.6 835.3Services received 43.8 36.1Services rendered 2.5 2.018. TAX SITUATIONAs of November 5, 2010, SEAT S.A.’s Board of Directors agreed on adhesion to the Code of Best Tax Practices.The Code contains a raft of recommendations and commitments designed to improve application of the taxationsystem, increase legal certainty and reciprocal cooperation relations – on the basis of transparency and goodfaith – between the Spanish Taxation Authority and companies, the latter pledging themselves to apply fiscalpolicies which are responsible and known to the Board of Directors.By agreeing to adhere to the Code, SEAT S.A. makes a formal public commitment to implementing a fiscal policythe principles of which form an integral part of its business culture, namely:/ The design and implementation of operations within the legal framework of each country it operates in, withtotal fiscal transparency in all such operations./ A cautious approach in its fiscal policy, visible via its consultations with the relevant Tax Authority when in doubtas to interpretation, proceeding in compliance with prevailing administrative practice and legal requirements./ Constant oversight of operations and criteria applied to the same so as to avoid significant taxation risks.Throughout fiscal year 2011, SEAT S.A. maintained a fiscal policy which followed the above-mentioned principles,as a result of which the company was fully compliant with the commitments set out in the Code of Best TaxPractices, and was not aware of any operation with fiscally relevant repercussions.SEAT, S.A., as the parent company, has been integrated in the SEAT Group since 1988, under the consolidated taxsystem of corporation tax, with No. 2/88 (see Appendix 2).In 2011, the positive tax result of the SEAT Group deriving from its consolidated corporation tax totalled 3.5 millioneuros, after offsetting negative tax assessment base for previous years amounting to 50.5 million euros, andapplying fiscal deductions amounting to 11.6 million euros.The conciliation of the posted result with the tax assessment base for the corporation tax for SEAT, S.A., includingeliminations and adjustments from tax consolidation, is as follows:NOTES | ANNUAL REPORT 2011 | 111


Profit and Loss StatementEquityMillions of euros Increase Decrease Total Increase Decrease TotalResult for year 0.0 (61.5) (61.5) 0.0 0.0 0.0Corporation tax 0.0 (92.7) (92.7) 0.0 0.0 0.0Permanent differences 0.0 (109.6) (109.6) 0.0 0.0 0.0Specific to the company 0.0 0.0 0.0 0.0 0.0 0.0From consolidation adjustment 0.0 (109.6) (109.6) 0.0 0.0 0.0Timing differences 383.8 (238.4) 145.4 0.0 0.0 0.0Specific to the company 371.5 (236.0) 135.5 0.0 0.0 0.0Originating in the year 343.7 (0.4) 343.3 0.0 0.0 0.0Originating in previous years 27.8 (235.6) (207.8) 0.0 0.0 0.0From consolidation adjustment 12.3 (2.4) 9.9 0.0 0.0 0.0Originating in the year 8.1 (1.8) 6.3 0.0 0.0 0.0Originating in previous years 4.2 (0.6) 3.6 0.0 0.0 0.0Tax assessment base 383.8 (502.2) (118.4) 0.0 0.0 0.0The 118.4 million euros from SEAT, S.A.’s negative tax assessment base for the year will be offset by positivetax assessment bases from other SEAT Group companies in the year’s consolidated statement, generating a taxincome of 35.5 million euros.50.5 million euros in SEAT, S.A. negative tax assessment base corresponding to previous years has been appliedto the consolidated corporation tax settlement, as well as 10.6 million euros in fiscal deductions.Additionaly, due to the incorporation of adjustments from the preceding year to the value of -0.7 million euros, anaccrued income has been entered in the Profit and Loss Statement, under current corporation tax, for an amountof 60.6 million euros.As a consequence of consolidated taxation, the total reciprocal debts and loans between the Group companiesamount to 69.1 million euros.At December 31, 2011, the accumulated deferred asset taxes amounted to 400.6 million euros, of which 202.1million euros arise from timing differences; 198.5 million euros come from fiscal loans deriving from deductionsand negative tax assessment bases pending application regarded as assured.For their part, deferred taxes on liabilities amount to 30.2 million euros, of which 23.5 million euros arise fromtiming differences, basically due to the free tax depreciation of R&D costs activated as intangible assets, and 6.7million euros are related to headings of equity.112 | ANNUAL REPORT 2011 | NOTES


Variation during the fiscal year on assets and liabilities due to deferred taxes total 24.3 and -8.9 million eurosrespectively. The detailed breakdown of movement of the same is as follows:Millions of euros 2011 2010Initial Balance 337.2 217.4Deferred taxes entered directly to profit and loss statement 32.1 120.7Deferred taxes entered directly to equity (0.1) (2.8)Deferred taxes transferred to profit and loss statement 1.2 1.9End Balance 370.4 337.2The capital gains generated in 2011, totalling 1.5 million euros, which might benefit from the tax deductionincentive for reinvestment of extraordinary profits, thanks to reinvestment in new assets, have generated a taxcredit of 0.2 million euros. Tax credits were applied in previous fiscal years where reinvestment was made in thesame year, namely: 0.1 million euros in 2004, 7.8 in 2005, 1.8 in 2006, 11.9 in 2007 and 2.6 in 2008.At December 31, 2011, SEAT, S.A. tax credits or tax incentives for the following items and amounts in millions ofeuros were left pending for application:BalanceMaturity dateMillions of euros 31.12.11 2012 2013 2014 2015 LaterR&D 233.6 0.0 0.0 0.0 0.0 233.6Export companies 17.8 2.2 3.6 3.2 3.6 5.2Environmental investment 6.7 0.0 0.0 0.0 4.1 2.6Vocational training 1.5 0.2 0.2 0.2 0.2 0.7Pension plans contributions 0.3 0.0 0.0 0.0 0.0 0.3These tax credits and incentives will be applied in accordance with consolidated settlements of the Group, withinthe legal period established for each one.The company is open to an administrative audit for non-prescribed taxes for the period 2008-2011, with theexception of corporation tax which extends to the period 2007-2010.NOTES | ANNUAL REPORT 2011 | 113


19. INCOME AND EXPENSESa) Distribution of net salesThe distribution of items is as follows:Millions of euros 2011 2010Vehicles 4,362.5 3,966.1Spare parts 503.3 526.8Other sales 183.3 169.9Materials 144.5 137.2By-products and reusable waste 34.8 29.2Services 4.0 3.55,049.1 4,662.8The geographical distribution of markets is as follows:Millions of euros 2011 2010Spain 1,261.4 1,595.1Rest of European Union 3,252.5 2,589.3Rest of world 535.2 478.45,049.1 4,662.8b) Change in inventories of finished goods and work in progressMillions of euros 2011 2010Decrease/increase of inventory 84.7 (14.6)Work in progress 17.1 (4.4)Partly-finished goods 1.5 2.1Finished goods 66.1 (12.3)Impairment of inventory (12.6) (2.1)72.1 (16.7)114 | ANNUAL REPORT 2011 | NOTES


c) SuppliesMillions of euros 2011 2010Acquired products 637.2 498.1Purchases 637.0 484.1Decrease/increase of inventory 0.2 14.0Raw materials and other supplies 3,314.1 2,942.4Purchases 3,326.2 2,945.3Decrease/increase of inventory (12.1) (2.9)Other external expenses 8.8 9.4Impairment of acquired products, raw materials and others (1.1) 1.13,959.0 3,451.0d) Other operating incomeMillions of euros 2011 2010Sundry income 576.9 398.9Operating subventions (see Note 13) 3.1 6.7Discounted provisions 5.0 4.9Other income 1.8 0.0586.8 410.5The ‘Sundry income’ section includes income from the rendering of services to Group companies and personnel,and other income.e) Personnel costsMillions of euros 2011 2010Wages, salaries and similar concepts 402.9 352.0Social costs 125.1 107.7Social security 111.7 102.4Others 13.4 5.3528.0 459.7NOTES | ANNUAL REPORT 2011 | 115


f) Other operating expensesMillions of euros 2011 2010External services 1,099.8 1,245.0Taxes 7.5 6.7Losses, impairment and variation in provisions due to trade operations 140.5 76.4Greenhouse gas emission rights 0.0 0.1Other expenses 0.0 22.81,247.8 1,351.0g) Financial incomeMillions of euros 2011 2010For participations 109.6 31.9Group companies 109.6 31.9Third-party 0.0 0.0For other investments and financial instruments 1.5 3.0Group companies 0.9 1.9Third-party 0.6 1.1111.1 34.9h) Financial expensesMillions of euros 2011 2010For Group companies debts 15.6 9.9For third-party debts 3.6 9.6Discounted provisions and debts 0.4 5.119.6 24.6i) Impairment and result on disposal of financial instrumentsThis heading contains principally those impairments and reversions of participations in Group companies.116 | ANNUAL REPORT 2011 | NOTES


20. ENVIRONMENTa) Environment-related assetsUnder the section ‘Tangible assets’, the company possesses a waste water treatment facility, plus a heat andpower co-generation plant, at the Martorell factory, as well as other environment-related assets. The combinedgross value of these facilities amounts to 113.7 million euros, and accumulated depreciation stands at 90.6million euros (106 and 83.7 respectively in 2010).In the wide-ranging investment programme implemented in 2011, a capitalised amount of 7.7 million euros, plusanother totalling 2.1 million euros (6.3 and 3.7 respectively in 2010) corresponding to firm commitments for thepurchase of capital goods has been identified, which can be devoted entirely to environmental protection-relatedactivities.b) Environment-related liabilitiesIn compliance with the European Union directive on end-of-life vehicles, approved in 2000, the company set up aprovision to cover risks deriving from end-of-life vehicle recycling.c) Environment-related expensesFor 2011, expenses for material and outside services have been identified. Said expenses, earmarked forprotection and improvement of the environment, can be broken down as follows:Millions of euros 2011 2010Control and monitoring of air pollution 0.3 0.1Waste water treatment and management 2.3 2.1Industrial waste treatment and management 6.7 6.5Energy savings 0.4 1.0Visual impact improvement 0.2 0.2Communication management 0.1 0.0Environmental process management 0.3 0.4End-of-life vehicles management 0.4 0.4Miscellaneous 0.1 0.210.8 10.9Expenses accounted for the financial year, regarding amortization of environment-related assets amount to 6.9million euros (8.8 in 2010).The overall estimated staff costs of SEAT employees devoted to total or partial implementation of environmentalprotection-related activities amount to 1.5 million euros (1.3 in 2010).NOTES | ANNUAL REPORT 2011 | 117


d) Environment-related incomeIncome deriving from the sale of by-products and reusable waste totalled 34.8 million euros (29.2 in 2010).21. WITHIN-GROUP OPERATIONSa) Group companiesThe following transactions were carried out with Volkswagen Group companies. In addition to the companiesincluded in the Appendix 2 of these Notes, the most noteworthy being: Audi AG; Audi Hungaria Motor Kft.; AudiTooling Barcelona, S.L.; Groupe VW France s.a.; Skoda Auto a.s.; Skoda Auto Slovensko s.r.o.; VW AG; VW deMéxico, S.A.; VW Finance Belgium S.A.; VW Group Italia S.p.A.; VW Group Services S.A.; VW Group Sverige A.B.;VW Group UK Ltd.; VW Insurance Service correduría de seguros S.L.; VW Motor Polska Sp.z.o.o.; and VW ZubehöerGmbH.Millions of euros 2011 2010Purchases 1,257.3 1,148.5Materials 836.6 775.7Spare parts 196.2 211.2Vehicles 224.5 161.6Net sales 2,804.7 2,024.8Services received 511.2 582.5Services rendered 468.0 310.1Accrued financial income 0.9 1.9Dividends received 109.6 31.9Accrued financial expenses 15.6 9.9The breakdown of the total amount of the main transactions carried out in foreign currencies is as follows:Millions of euros 2011 2010Purchases 41.9 57.9Net sales 666.9 578.0Services received 37.5 29.1Services rendered 1.7 1.2118 | ANNUAL REPORT 2011 | NOTES


Purchases refer mainly to the acquisition of vehicles, parts, accessories and machinery. Sales correspondedmainly to vehicles produced in Spain for export markets. Services received comprise R&D, transport ofsales, maintenance of equipment, logistics, marketing, consulting services and training. Services renderedrefer mainly to transport, warranties, advertising, technical assistance, training, vehicle rental and leasing ofbuildings. Financial income and expenses stem from loans and current account operations between Groupcompanies.The margin generated by sales operations with Group companies is broken down by business lines as follows:29.6% in materials, 24.6% in spare parts, and 5.8% in vehicles (16.9%; 46.3%; and 9.7%, respectively in 2010).Purchases made from Group companies were done so in normal market conditions.In the Notes, other transactions with Group companies are referenced: Notes 6b and 6c, additions of assets; andNote 18, net charges for tax consolidation.On December 31, 2011 SEAT, S.A. (Unipersonal Company) and Volkswagen International Finance N.V., soleshareholder of the company (see Note 12), have no agreements in force.b) Board of DirectorsThe total amount of remuneration received under all headings by members of the Board of Directors and by SeniorDirectors in the exercise of their functions during 2011 stood at 5.4 million euros (3.4 in 2010).No advances or credits have been accorded to either members of the Board of Directors or Senior Management,nor other commitments made vis-à-vis pensions, insurance policies, credits, guarantees or similar items duringthe 2011 and 2010 financial years.Members of the Board of Directors make no declaration of interest concerning Article 229 of the new CapitalCompany Law, referring to posts or responsibilities which Board Members hold or discharge in companies outsidethe Group of which SEAT is a member, concerning activities similar, analogous or complementary to the statedbusiness aims of the company.Members of SEAT, S.A.’s Board of Directors at December 31, 2011 also holding posts or responsibilities such asmembers of Boards of Directors or Management in other Volkswagen Group companies, concerning activitiessimilar, analogous or complementary to the stated business aims of SEAT are listed hereafter:NOTES | ANNUAL REPORT 2011 | 119


PostDr. Francisco Javier García SanzVolkswagen AGAUDI AGFAW-Volkswagen Automotive Company, Ltd.Scania AB, SödertäljeScania CV AB, StockholmShanghai-Volkswagen Automotive Company, Ltd.Volkswagen (China) Investment Company, Ltd.Volkswagen Group of America, Inc.Porsche AGMember of the Board of ManagementMember of the Supervisory BoardMember of the Board of DirectorsMember of the Board of DirectorsMember of the Board of DirectorsMember of the Board of DirectorsMember of the Board of DirectorsMember of the Board of DirectorsMember of the Supervisory BoardJames MuirGroupe Volkswagen France s.a.Volkswagen Group Italia S.p.A.Member of the Board of DirectorsMember of the Board of DirectorsMatthias MüllerPorsche AGChairman of the Board of Management22. OTHER INFORMATIONa) WorkforceThe breakdown of the total average basic workforce by functions of SEAT, S.A. is as follows:2011 2010Productive wage earners 6,888 6,544Time-rate wage earners 986 995Managers, technicians, administrative and support staff 2,998 2,764Members of the Executive Committee 8 710,880 10,310120 | ANNUAL REPORT 2011 | NOTES


The breakdown of SEAT, S.A.’s basic workforce at December 31 is as follows:2011 2010Men Women Total Men Women TotalProductive wage earners 5,695 1,581 7,276 4,936 1,574 6,510Time-rate wage earners 964 35 999 948 35 983Managers, technicians, administrative andsupport staff2,326 785 3,111 2,155 699 2,854Members of the Executive Committee 8 0 8 7 0 78,993 2,401 11,394 8,046 2,308 10,354SEAT, S.A.’s Board of Directors comprises 5 members (male).b) AuditorsThe fees accrued by PricewaterhouseCoopers Auditores, S.L. for audit services were 0.4 million euros (0.3 in2010). Likewise, the fees received for other services provided by the auditor and other companies which use thePricewaterhouseCoopers brand totalled 1.5 million euros (2 in 2010).23. RESULT OF SEAT BRANDMillions of eurosSEATSpanishAccountingSEATbrandIFRSOperating result 2011 (231.9) (225.3)Result after tax 2011 (61.5) (158.1)SEAT, S.A. follows the principles and rules of the Spanish General Accounting Plan (SGAP) for the preparation ofits annual accounts. This notwithstanding, since it is a subsidiary of Volkswagen AG, it consolidates its accountstogether with those of other subsidiary companies (see Appendix 2) within the Volkswagen Group (see Note 2).Said consolidation is carried out in conformity to International Financial Reporting Standards (IFRS), giving rise tocertain valuation and accounting differences between company financial statements. Thus, results vary accordingto what companies are included, accounting standards applied, and accounts structure used.NOTES | ANNUAL REPORT 2011 | 121


APPENDIX 1.EVOLUTION OF NON-CURRENTASSETS(millions of euros)2010Cost of acquisition or manufactureInitialBalance01.01.10 Additions Disposals Transfers ImpairmentEndBalance31.12.10Intangible assets 1,229.8 196.6 (9.6) 0.0 0.0 1,416.8Research and Development 808.4 52.6 (5.7) 198.9 0.0 1,054.2Software 47.2 3.6 (3.8) 0.0 0.0 47.0Greenhouse gas emission rights 0.1 0.1 (0.1) 0.0 0.0 0.1Other intangible assets (*) 148.1 (23.0) 0.0 9.2 0.0 134.3Payments on account and intangibleassets in progress226.0 163.3 0.0 (208.1) 0.0 181.2Tangible assets 4,194.9 186.8 (97.0) 0.0 0.0 4,284.7Land and buildings 665.1 5.7 0.0 0.0 0.0 670.8Technical equipment and machinery 1,466.1 44.1 (41.4) 21.4 0.0 1,490.2Other facilities, tools and office equipment 1,929.7 30.5 (33.4) 23.3 0.0 1,950.1Other tangible assets 44.6 0.7 (22.2) 0.0 0.0 23.1Payments on account and tangible assetsin progress89.4 105.8 0.0 (44.7) 0.0 150.5Long-term Group companies investments 1,163.2 0.0 (10.7) 0.0 0.0 1,152.5Participations in Group companies 1,152.3 0.0 0.0 0.0 0.0 1,152.3Loans to Group companies 0.3 0.0 (0.1) 0.0 0.0 0.2Other financial assets 10.6 0.0 (10.6) 0.0 0.0 0.0Long-term financial investments 1.9 0.3 0.0 (0.3) 0.0 1.9Other participations 0.1 0.0 0.0 0.0 0.0 0.1Other loans 1.3 0.3 0.0 (0.3) 0.0 1.3Other financial assets 0.5 0.0 0.0 0.0 0.0 0.5Deferred tax assets 267.0 109.3 0.0 0.0 0.0 376.3Total 6,856.8 493.0 (117.3) (0.3) 0.0 7,232.2(*) The price of an intangible asset acquired from the Group in previous financial years was regularized in 2010.122 | ANNUAL REPORT 2011 | APPENDIX 1. EVOLUTION OF NON-CURRENT ASSETS


Depreciation / ImpairmentNet book valueInitialBalance01.01.10 Additions Disposals Transfers ImpairmentEndBalance31.12.10InitialBalance01.01.10EndBalance31.12.10712.1 102.6 (8.9) 0.0 39.1 844.9 517.7 571.9570.4 95.7 (5.1) 0.0 39.1 700.1 238.0 354.145.3 1.3 (3.8) 0.0 0.0 42.8 1.9 4.20.0 0.0 0.0 0.0 0.0 0.0 0.1 0.196.4 5.6 0.0 0.0 0.0 102.0 51.7 32.30.0 0.0 0.0 0.0 0.0 0.0 226.0 181.23,132.5 205.1 (96.7) 0.0 1.4 3,242.3 1,062.4 1,042.4258.2 13.8 0.0 0.0 0.0 272.0 406.9 398.81,202.3 82.9 (41.4) 0.0 0.0 1,243.8 263.8 246.41,630.5 107.2 (33.1) 0.0 1.4 1,706.0 299.2 244.141.5 1.2 (22.2) 0.0 0.0 20.5 3.1 2.60.0 0.0 0.0 0.0 0.0 0.0 89.4 150.587.6 0.0 0.0 0.0 (49.0) 38.6 1,075.6 1,113.987.6 0.0 0.0 0.0 (49.0) 38.6 1,064.7 1,113.70.0 0.0 0.0 0.0 0.0 0.0 0.3 0.20.0 0.0 0.0 0.0 0.0 0.0 10.6 0.00.1 0.0 0.0 0.0 0.0 0.1 1.8 1.80.1 0.0 0.0 0.0 0.0 0.1 0.0 0.00.0 0.0 0.0 0.0 0.0 0.0 1.3 1.30.0 0.0 0.0 0.0 0.0 0.0 0.5 0.50.0 0.0 0.0 0.0 0.0 0.0 267.0 376.33,932.3 307.7 (105.6) 0.0 (8.5) 4,125.9 2,924.5 3,106.3APPENDIX 1. EVOLUTION OF NON-CURRENT ASSETS | ANNUAL REPORT 2011 | 123


2011Cost of acquisition or manufactureInitialBalance01.01.11 Additions Disposals Transfers ImpairmentEndBalance31.12.11Intangible assets 1,416.8 210.5 (96.4) 0.0 0.0 1,530.9Research and Development 1,054.2 6.7 (83.2) 16.8 0.0 994.5Software 47.0 1.4 0.0 0.0 0.0 48.4Greenhouse gas emission rights 0.1 0.1 0.0 0.0 0.0 0.2Other intangible assets 134.3 34.1 0.0 0.0 0.0 168.4Payments on account and intangibleassets in progress181.2 168.2 (13.2) (16.8) 0.0 319.4Tangible assets 4,284.7 206.4 (82.2) 0.0 0.0 4,408.9Land and buildings 670.8 13.2 0.0 13.0 0.0 697.0Technical equipment and machinery 1,490.2 85.5 (45.0) 102.7 0.0 1,633.4Other facilities, tools and office equipment 1,950.1 25.0 (37.0) 2.0 0.0 1,940.1Other tangible assets 23.1 1.7 (0.2) 0.0 0.0 24.6Payments on account and tangible assets inprogress 150.5 81.0 0.0 (117.7) 0.0 113.8Long-term Group companies investments 1,152.5 0.0 (0.1) (29.4) 0.0 1,123.0Participations in Group companies 1,152.3 0.0 0.0 (29.4) 0.0 1,122.9Loans to Group companies 0.2 0.0 (0.1) 0.0 0.0 0.1Other financial assets 0.0 0.0 0.0 0.0 0.0 0.0Long-term financial investments 1.9 0.2 0.0 (0.3) 0.0 1.8Other participations 0.1 0.0 0.0 0.0 0.0 0.1Other loans 1.3 0.2 0.0 (0.3) 0.0 1.2Other financial assets 0.5 0.0 0.0 0.0 0.0 0.5Deferred tax assets 376.3 24.3 0.0 0.0 0.0 400.6Total 7,232.2 441.4 (178.7) (29.7) 0.0 7,465.2124 | ANNUAL REPORT 2011 | APPENDIX 1. EVOLUTION OF NON-CURRENT ASSETS


Depreciation / ImpairmentNet book valueInitialBalance01.01.11 Additions Disposals Transfers ImpairmentEndBalance31.12.11InitialBalance01.01.11EndBalance31.12.11844.9 107.4 (42.8) 0.0 45.1 954.6 571.9 576.3700.1 95.5 (42.8) 0.0 17.6 770.4 354.1 224.142.8 2.0 0.0 0.0 0.0 44.8 4.2 3.60.0 0.0 0.0 0.0 0.0 0.0 0.1 0.2102.0 9.9 0.0 0.0 27.5 139.4 32.3 29.00.0 0.0 0.0 0.0 0.0 0.0 181.2 319.43,242.3 193.8 (82.4) 0.0 45.7 3,399.4 1,042.4 1,009.5272.0 14.3 0.0 0.0 0.0 286.3 398.8 410.71,243.8 82.7 (45.0) 0.0 19.3 1,300.8 246.4 332.61,706.0 95.7 (37.2) 0.0 26.4 1,790.9 244.1 149.220.5 1.1 (0.2) 0.0 0.0 21.4 2.6 3.20.0 0.0 0.0 0.0 0.0 0.0 150.5 113.838.6 0.0 0.0 (19.9) (1.8) 16.9 1,113.9 1,106.138.6 0.0 0.0 (19.9) (1.8) 16.9 1,113.7 1,106.00.0 0.0 0.0 0.0 0.0 0.0 0.2 0.10.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00.1 0.0 0.0 0.0 0.0 0.1 1.8 1.70.1 0.0 0.0 0.0 0.0 0.1 0.0 0.00.0 0.0 0.0 0.0 0.0 0.0 1.3 1.20.0 0.0 0.0 0.0 0.0 0.0 0.5 0.50.0 0.0 0.0 0.0 0.0 0.0 376.3 400.64,125.9 301.2 (125.2) (19.9) 89.0 4,371.0 3,106.3 3,094.2APPENDIX 1. EVOLUTION OF NON-CURRENT ASSETS | ANNUAL REPORT 2011 | 125


APPENDIX 2.SUBSIDIARYCOMPANIES(millions of euros)HoldingLocationDirectIndirectProductionGearbox del Prat, S.A. (*) Prat de Ll. (Barcelona) 100SEAT Sport, S.A. (*) Martorell (Barcelona) 100Volkswagen Navarra, S.A. (*) Arazuri (Navarre) 100Volkswagen Argentina, S.A. (**) Buenos Aires (Argentina) 100Distribution and Marketing SEAT (***)SEAT Center Arrábida Automovéis, LDA Setúbal (Portugal) 2 98SEAT Deutschland GmbH Mörfelden-Walldorf (Germany) 100SEAT Deutschland Niederlassung GmbH Frankfurt (Germany) 100SEAT Motor España, S.A. (*) Barcelona 100SEAT Saint-Martin SAS Paris (France) 100Distribution and Marketing VW/Audi/SkodaVolkswagen-Audi España, S.A. (*) Prat de Ll. (Barcelona) 100Volkswagen-Audi Retail Spain, S.L. (*) Prat de Ll. (Barcelona) 100Astur Wagen, S.A. (*) Gijón (Asturias) 100Barna Wagen, S.A. (*) Barcelona 100Castellana Wagen, S.A. (*) Madrid 100Catalunya Wagen, S.A. (*) Barcelona 100Leioa Wagen, S.A. Leioa (Vizcaya) 100Levante Wagen, S.A. (*) Valencia 100Málaga Wagen, S.A. (*) Málaga 100Sevilla Wagen, S.A. (*) Sevilla 100Valladolid Wagen, S.A. (*) Valladolid 100Vallehermoso Wagen, S.A. (*) Madrid 100ServicesCentro Técnico de SEAT, S.A. (*) Martorell (Barcelona) 96Volkswagen Finance, S.A. (*) Alcobendas (Madrid) 100Servilease, S.A. (*) Alcobendas (Madrid) 100SEAT Portugal, Unipessoal, LDA Lisbon (Portugal) 100Volkswagen Compañía Financiera, S.A. Buenos Aires (Argentina) 100Volkswagen S.A. De Ahorro Para Fines Determinados Buenos Aires (Argentina) 100(*) Companies subject to corporation tax under the consolidated tax regime.(**) For valuation purposes, the figures are considered according to Group rules.(***) In 2011, SEAT Motor España, S.A. is not included, having been reclassified under section ‘Non-current assets available for sale’ (See Note 5n).126 | ANNUAL REPORT 2011 | APPENDIX 2. SUBSIDIARY COMPANIES


Grossvalue31.12.11Depreciation31.12.11Book value Equity Profit/lossfor year31.12.11 31.12.10 31.12.11 31.12.102011Dividendreceived201158.9 0.0 58.9 58.9 136.8 123.5 13.70.1 0.0 0.1 0.1 1.8 4.0 (2.2)654.4 0.0 654.4 654.4 666.2 654.9 58.0 44.6104.6 0.0 104.6 104.6 140.1 120.8 15.30.0 0.0 0.0 0.0 0.3 0.5 (0.2)51.1 (16.0) 35.1 33.3 35.1 33.3 1.80.2 0.3 (0.1)9.5 9.51.0 (1.0) 0.0 0.0 0.3 0.4 (0.1)16.0 0.0 16.0 16.0 239.4 241.0 18.4 65.031.8 30.7 1.23.0 3.3 (0.4)0.2 0.2 (0.9)3.3 3.3 0.21.7 2.5 0.03.9 4.1 0.64.8 4.6 1.11.3 1.2 0.16.4 6.8 0.52.8 3.0 0.42.2 2.3 (0.2)99.6 0.0 99.6 99.6 131.2 128.9 2.1136.6 0.0 136.6 136.6 345.4 320.2 25.38.4 3.1 (1.7)0.6 0.0 0.6 0.6 1.3 1.4 0.08.3 6.9 1.65.0 7.0 1.7APPENDIX 2. SUBSIDIARY COMPANIES | ANNUAL REPORT 2011 | 127


CONSUMPTION AND EMISSION FIGURESConsumption (mveg) l/100 km - CO 2(g/km) emissionsModel (*) (**)Power Gearbox Consumption (mveg) l/100 km CO 2emissionsAverage (g/km)kw hp Man. Aut. Town Out of Town AverageMii1.0 MPI 44 60 x 5.6 3.9 4.5 1051.0 MPI 55 70 x 5.9 4.0 4.7 108Ibiza/SC/ST1.2 12V 44 60 x 7.1 4.4 5.4 1251.2 12V 51 70 x 7.1 / 7.3 4.4 / 4.5 5.4 / 5.5 125 / 1281.4 16V 63 85 x 8.0 4.7 5.9 1391.6 BiFuel 60 81 x 10.4 6.0 7.6 1231.2 TSI 77 105 x x 7.0 4.4 5.3 1241.2 TSI Ecomotive 77 105 x 6.3 4.4 5.1 1191.4 TSI FR 110 150 x 7.5 5.1 5.9 1391.4 TSI Cupra 132 180 x 8.3 5.3 6.4 1481.2 TDI CR 55 75 x 4.6 / 4.8 3.3 / 3.4 3.8 / 3.9 99 / 1021.2 TDI CR E Ecomotive 55 75 x 4.1 / 4.2 3.0 / 3.1 3.4 / 3.5 89 / 921.6 TDI CR 66 90 x 5.1 3.6 4.2 1091.6 TDI CR 77 105 x 5.1 / 5.4 3.6 4.2 / 4.3 109 / 1122.0 TDI CR 105 143 x 5.9 / 6.0 3.9 / 4.0 4.6 / 4.7 119 / 123León/Altea/XL/Freetrack1.4 63 85 x 8.4 / 8.6 5.1 / 5.4 6.3 / 6.5 147 / 1521.2 TSI 77 105 x 7.1 / 7.3 4.9 / 5.1 5.7 / 5.9 132 / 1391.2 TSI Ecomotive 77 105 x 6.5 / 6.9 4.7 / 5.1 5.4 / 5.7 124 / 1321.4 TSI 92 125 x 8.0 / 8.4 5.2 / 5.7 6.2 / 6.7 145 / 1551.6 BiFuel 72 98 x 12.8 / 13.1 7.5 / 7.8 9.5 / 9.8 153 / 1591.8 TSI 118 160 x x 8.8 / 9.0 5.3 / 5.6 6.6 / 6.8 153 / 1592.0 TSI FR 155 210 x x 9.9 / 11.0 5.7 / 7.0 7.3 / 8.4 170 / 1972.0 TSI Cupra 177 240 x 10.7 6.6 8.1 1902.0 TSI Cupra R 195 265 x 10.7 6.6 8.1 1901.6 TDI CR 66 90 x 5.6 / 5.9 3.9 / 4.2 4.5 / 4.8 119 / 1261.6 TDI CR 77 105 x x 5.6 / 5.9 3.9 / 4.4 4.5 / 4.8 119 / 1291.6 TDI CR Ecomotive 77 105 x 5.1 / 5.5 3.7 / 4.3 4.2 / 4.7 109 / 1241.6 TDI CR E Ecomotive 77 105 x 4.7 / 5.2 3.4 / 4.1 3.8 / 4.5 99 / 1192.0 TDI CR 103 140 x x 6.1 / 7.4 4.1 / 5.1 4.8 / 5.9 125 / 1552.0 TDI CR 125 170 x x 6.5 / 7.1 4.3 / 5.3 5.1 / 5.9 134 / 155Exeo/ST1.8 TSI 88 120 x 10.2 / 10.4 5.6 / 5.7 7.3 / 7.4 169 / 1721.8 TSI 118 160 x 10.2 / 10.4 5.6 / 5.7 7.3 / 7.4 169 / 1722.0 TSI 147 200 x 10.6 6.0 7.7 1792.0 TSI 155 211 x 9.6 / 9.7 5.3 / 5.4 6.9 / 7.0 159 / 1622.0 TDI CR 88 120 x 6.4 / 7.4 4.1 4.9 / 5.3 129 / 1392.0 TDI CR 105 143 x 6.4 / 7.4 4.1 4.9 / 5.3 129 / 1392.0 TDI CR 105 143 x 7.1 / 7.6 4.6 / 4.8 5.5 / 5.8 146 / 1532.0 TDI CR 125 170 x 7.3 / 7.8 4.4 5.4 / 5.7 142 / 148Alhambra (***)1.4 TSI Ecomotive 110 150 x x 9.2 / 9.4 6.1 / 6.6 7.2 / 7.6 167 / 1782.0 TSI 147 200 x 11.5 6.6 8.4 1962.0 TDI CR Ecomotive 85 115 x 6.8 4.8 5.5 1432.0 TDI CR Ecomotive 103 140 x x 6.8 / 7.4 4.8 / 5.2 5.5 / 6.0 143 / 1582.0 TDI CR Ecomotive 125 170 x x 6.7 / 7.3 5.0 / 5.4 5.8 / 5.9 152 / 154* Engines sold in European Union in 2011. Discontinued models not included.** Where different models provide different results, data shown refer to minimum and maximum values.*** CO 2value for 5-seat model.128 | ANNUAL REPORT 2011 | CONSUMPTION AND EMISSION FIGURES


SEAT, S.A.KEY FIGURES (2007/2011)07 08 09 10 11Retail sales (units) 431,024 368,104 336,683 339,501 350,009Wholesales of new vehicles (units) 408,720 369,457 303,230 339,315 358,970Wholesales of used vehicles (units) 2,647 4,580 8,356 6,838 8,062Production in Martorell plant (units) 398,704 370,293 301,287 335,057 353,420Production of SEAT brand in Group plants (units) 14,242 10,282 6,215 10,050 19,129Basic workforce at 31.12 11,074 10,697 10,369 10,354 11,394Martorell (includes Spare Parts Centre) 9,718 9,405 9,126 9,101 10,129Zona Franca 1,332 1,269 1,222 1,220 1,223Other centres 24 23 21 33 42Partial retirement workforce at 31.12 2,861 1,878 1,097 372 5Net sales (millions of euros) 5,571.1 4,816.9 4,101.3 4,662.8 5,049.1Spain 2,234.9 1,694.8 1,393.0 1,595.1 1,261.4Vehicles 1,696.3 1,157.2 911.5 1,114.7 787.3Spare parts 401.2 386.5 344.3 338.4 319.2Other sales 137.4 151.1 137.2 142.0 154.9Export 3,336.2 3,122.1 2,708.3 3,067.7 3,787.7Vehicles 3,075.2 2,875.9 2,491.3 2,851.4 3,575.2Spare parts 188.1 189.6 179.2 188.4 184.1Other sales 72.9 56.6 37.8 27.9 28.4Shareholders’ equity (millions of euros) 1,274.1 1,089.4 821.7 717.8 656.3Result before tax (millions of euros) 131.6 0.9 (299.5) (269.7) (154.2)After-tax result (millions of euros) 169.7 44.4 (186.5) (103.9) (61.5)Depreciation (millions of euros) 239.7 276.6 339.2 307.7 301.2Investments (millions of euros) 400.2 478.4 397.4 383.7 417.1


SEATCREDITSThis version sets forth theManagement Report, the Auditors’Report and the Annual Accounts ofSEAT, S.A. (Balance Sheet, Profit andLoss Statement, Statement ofChanges in Equity, Cash FlowStatement, Notes and Appendices 1and 2) for the year 2011, compiledaccording to the criteria and rulesestablished by Spanish law*.This version of the Annual Report is atranslation from the Spanish original.Once approved by the GeneralMeeting of Shareholders, the AnnualAccounts and Management Reportwill be deposited in the CommercialRegistry in Barcelona together withthe Auditors’ Report. These reportsare authoritative. The ConsolidatedAnnual Accounts of VOLKSWAGEN AG,jointly with its Management Reportand Auditors’ Certificate will bedeposited at the same Registry**.Approved by the Board of Directorsat the meeting of February 15, 2012.Published by SEAT, S.A.Balances y Cierres / ComunicaciónAutovía A2, Km. 585E-08760 MartorellTel. (+34) 937 08 50 00Fax (+34) 937 08 55 02www.seat.comDesign: www.cege.esL.D.: 2159-2012*Publication available on the Internet:http://www.seat.com**Art. 43 of the Spanish Commercial Code


SEAT, S.A.Balances y Cierres / ComunicaciónAutovía A2, Km. 585E-08760 MartorellTel. (+34) 937 08 50 00Fax (+34) 937 08 55 02www.seat.com

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