Cupra Australia admits it was too bullish with its sales forecasts

Cupra Australia has pared back its sales expectations for the next 18 months – a period in which at least a dozen new Chinese auto brands will arrive here – amid what it calls a changing new-car landscape.

The Spanish performance brand marked its arrival in Australia in July 2022 with a lavish launch party and a firm product line that started with the Cupra Leon hatch and the Formentor and Ateca mid-size SUVs, followed by the Cupra Born electric hatch.

Two years on, Cupra Australia has sold more than 6000 cars – including 1000 plug-in hybrid vehicles (PHEVs), accounting for a third of its sales in 2024 – and established 14 points of sale and 12 points of service nationally.

And there’s much more to come, with five new Cupra models or variants slated to arrive before the end of 2025, headed by the new Chinese-built Tavascan mid-size electric SUV this December, followed by the Born VZ (in the first quarter of 2025), the updated Leon hatch and Formentor crossover (second quarter), the Formentor Sportstourer wagon and the smaller Terramar electric SUV (both in the third quarter on next year).

However, a key component of Cupra’s original Australian market plan was a forecast of 7000 annual sales by 2025 – a firm target outlined by none other than Cupra global chief executive Wayne Griffiths.

“It needs to work by 2025,” Griffiths told carsales two years ago.

However, last week Cupra’s global vice-president of sales and marketing, Sven Schuwirth, said Cupra had rolled back its Australian sales expectations.

“We might adjust that forecast of 7000 sales for sure, looking at the environment and what’s happening in Australia at the moment,” Schuwirth said.

“Somehow, it’s struggling at the moment.

“We need to remain flexible. It’s a core recipe for the success of Cupra. It’s a buzzword but we are agile and quite flexible in terms of product offer.”

Asked what had prompted Cupra to readjust its local sales forecast, Schuwirth outlined unforeseen challenges since the brand’s local launch in 2022 – not only in Australia but abroad.

“It’s not only the new Chinese brands in Australia, it’s also what happens in terms of subsidies, tax regulations and so on. We are living in a very unclear environment, which has also made us stronger,” Schuwirth told carsales.

“Keeping in mind we launched the brand during COVID with a semi-conductor shortage, wars in Ukraine and Israel, logistics issues and energy issues. So we need to remain flexible.”

For brands bold enough to outline their sales forecasts publicly, most do so in terms of market share rather than raw numbers.

Cupra sold more than 230,000 vehicles globally in 2023 and has publicly targeted a market share of three per cent in its native Europe, where the brand was launched in 2018, but in Australia Schuwirth confirmed it would be content with a lower figure.

“We’re not naïve, but we want to play a relevant role in a very competitive market,” Schuwirth said.

“I’m not saying we want to be at three per cent, but we need to go one per cent in the direction of two per cent.”

Despite the challenges, Cupra still sees scope for sustainable sales growth in Australia, where it hopes to have at least 20 retail outlets by the end of 2025.

Pivotal in that will be the expansion of its franchise footprint, said Cupra Australia director Ben Wilks.

“At two years in the country, Cupra is committed to growing our sales and service network to accommodate an expanding line-up that from next year will include ICE, PHEV, BEV and mild-hybrids,” he said.

With strong supplies of PHEV vehicles now secured ahead of anticipated changes to the FBT benefits in early 2025, Cupra expects increasing demand for VZe versions of the Leon hatch and Formentor crossover SUV, following strong early interest in VZx performance variants of them and the Ateca medium SUV.

“The availability of true hybrids has seen that balance shift,” said Wilks.

“That’s why the new limited-run Formentor – the Tribe Edition – is a VZe. The convenience of dual forms of drive capability aside, plug-in hybrids benefit from significant government incentives. This means that a fully-equipped Tribe Edition can cost less on novated lease than the entry Formentor V.”

Cupra Australia head of product and marketing Jeff Shafer said that Cupra’s expansion in Australia remained on track and that recent challenges had reinforced why the Volkswagen Group-owned brand entered the market in the first place.

“We’re always mindful of the market. Australia is a super-competitive market and that’s one of the reasons why Cupra came here: to prove the brand will work in a market that is so competitive,” Shafer said.

“We always look at what we want to be and not where others are. We’re not ever going to be competing solely on price, but we’re aware of where we need to be.”

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