VW Group's Spanish SUV for 2016

Spanish car maker SEAT has confirmed that it has been developing a compact SUV for the past two years, to be launched in European markets from 2016.

Although SEAT hasn't officially sold cars in Australia since 1999, having pulled out after a five-year spell, the company is actively investigating a relaunch in Australia, something a new compact SUV would certainly facilitate.

"This is an excellent piece of news, since it takes SEAT into a new territory, in one of the largest and fastest growing segments in the world," stated SEAT Chairman and CEO, Jürgen Stackmann.

The new model will compete against models like the Nissan Qashqai (Dualis) and Hyundai iX35.

"The SUV is an important pillar in the future corporate strategy and is a major step forward on the road to reaching sustainable profitability for the company," said Stackmann.

To be constructed at SEAT's Martorell facility in Spain alongside the Audi Q3, the new SEAT will target the rapidly growing compact SUV segment and is almost certain to be based on the Volkswagen Group's modular MQB platform matrix. The MQB platform also underpins vehicles like the VW Golf, Audi A3 and Skoda Octavia.

Details on the new SEAT compact SUV are almost non-existent; its name, engine types, and configuration all still under lock and key, but it's a safe bet the soft-roader will be offered with a range of VW Group petrol and diesel engines.

The last time SEAT toyed with the idea of an SUV was the Tribu concept (pictured), revealed at the 2007 Frankfurt motor show.

SEAT is studying the viability of returning to the Australian market, with Stackmann telling motoring.com.au in September 2013 at the Frankfurt motor show that his company was "looking for opportunities for the next planning period, so we are obviously looking at Australia".

SEAT is owned by the Volkswagen Group, and the Spanish brand slots in above sister-brand Skoda and below Volkswagen in terms of affordability.

The problem for SEAT's Australian ambitions is its positioning, particularly as Skoda is currently expanding its footprint here, with the Yeti compact SUV already available and another larger SUV, dubbed Snowman, expected in the next few years.

"I think the pricing range won't be terribly different [to Skoda] -- it would be quite comparable. However, the investigation that we have to do is actually whether there is space to position a different brand with a different identity, a different twist," Stackmann explained.