Launched in Europe only a few years ago, Cupra is already eclipsing its better-known rivals like Mini, Jeep, and Alfa Romeo thanks to a youthful image, edgy design, and a willingness to take risks.
With sales of the urban lifestyle brand from Barcelona soaring 57% in the first half of this year, Cupra’s success may soon earn it a shot at breaking into the U.S.
It would be bucking the trend if it did succeed: The U.S. is a market Cupra’s parent company, Volkswagen Group, thus far has little to show for its grand ambitions.
Yet unlike China, Cupra boss Wayne Griffiths says, the United States “makes a lot of sense for us.”
The man behind Europe’s hottest new car brand has three litmus tests that first have to be met before even he takes such a big jump.
In an interview with Fortune, the 57-year-old Briton carefully laid out his plans and timeline for entering the United States, where his brand would likely have to sell upwards of 100,000 vehicles a year to justify the risk.
The first hurdle is whether U.S. consumers would embrace the image of Cupra as readily as their counterparts in Europe. However, initial customer clinics already prove promising enough for the company to openly talk about the plan.
The second is the need for local manufacturing on the continent; importing alone would not be sufficient. At least a sizable chunk of the volume will need to come from a model produced in one of the group’s three existing North American plants—or its upcoming one.
“That would be one of the requirements to be able to be profitable; it’s one of the assumptions in our business plan strategy for the U.S.,” Griffiths said.
This could mean either the VW plant in Puebla or Audi’s San José Chiapa site in Mexico.
An alternative would be building in the U.S. proper. This could be done in Chattanooga or in theory even the $2 billion factory currently under construction in South Carolina, where Volkswagen-made Scout brand vehicles are slated to run off the assembly line.
No immediate car suitable for U.S. market
Finally there is the question which Cupra model would best fit American tastes. And this is where the problems really start—nothing in its current range is suitable.
While the Formentor crossover would be a “great car for the U.S.” in Griffiths’s opinion, Cupra would only go to market with fully electric vehicles.
The fledgling EV market in America is still highly fragmented—providing more opportunities to grow than in China, where domestic carmakers are quickly shutting out once popular Western rivals like VW.
In the U.S., by comparison, there’s still plenty to play for, especially since siblings VW and Audi have largely flopped. The German duo have only been able to grab a first-half share of 3% and 1.8% of the EV market respectively, despite the group being among the first to invest heavily in the technology.
At present, Cupra’s bestselling model, the Formentor, only offers a hybrid option with a small plug-in battery for short zero-emission distances. That won’,t cut it.
Neither will the Born and upcoming Raval EVs, which are too small. That leaves just next year’s China-built Tavascan at present as a possibility.
“We’re working on a product portfolio that would fit for a more global market, including the U.S., but that involves big investments, as you can imagine,” he said.
The carmaker is therefore considering products built off the VW Group’s next-gen EV architecture called the Scalable Systems Platform (SSP).
That would mean any U.S. entry is another three years away, since that is at least how long it will take before the SSP, which will define many of the vehicle’s performance metrics, is ready.
Promotion with world-renowned FC Barcelona
If he does decide to proceed, Griffiths will take a completely opposite approach from Europe when it comes to distribution: bypassing retailers to sell directly to consumers.
While newer car brands increasingly take this route, it is surprising, since a major reason Griffiths has cited for Cupra’s success in Europe has been the brand’s ability to harness the VW Group’s dense network of dealers to quickly ramp sales.
By necessity, that means he is not expecting a similar trajectory for growth in the U.S. Instead, Griffiths has a more gradual and organic approach in mind, targeting a few select areas rather than fanning out to every corner of the continent and flooding the market with vehicles.
On the one hand, a methodical rollout could help protect and nurture a nascent brand, but it will certainly slow things down.
Interestingly, Griffiths is not looking to position the SEAT spinoff as Spanish in hopes of appealing to the growing demographic of Hispanic-Americans, despite its ethnic roots in the country.
If anything he wants Cupra associated specifically with Barcelona, its home and one of Europe’s trendiest cities known for its industrial design thanks to famous figures like architect Antoni Gaudí.
Here its partnership with FC Barcelona could help build greater appeal, since it is one of the few instantly recognizable names for American sports fans.
“The biggest awareness we thought we could get helping us prove to people we’re from Barcelona is using one of the best football clubs in the world,” he said.
Griffiths admits he spends a lot of his marketing budget to make sure his corporate logo is inextricably linked to the Catalonian hotspot.
“Cupra is the car brand from this city,” he said, “and this city inspires the work we do.”
In Europe that has proved a success so far—whether this will resonate with American car buyers will have to be seen.
This story was originally featured on Fortune.com
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