New car sales slowdown coming? How Cupra's fully refreshed 2025 line-up including updated Leon, Formentor, plus all-new Tavascan and Terramar will drive sales despite uncertain economy

VW Group’s sporty Spanish spin-off Cupra has had a meteoric rise in Australia.

Launched in 2022 from a position of no brand recognition (Cupra being a sub-brand of the Euro-only Seat), it leapt up the sales charts in a market traditionally resistant to new players, however 2024 has been a stumbling block, with the Spanish marque’s sales sliding nearly 30 per cent.

Cupra Australia head of product and marketing Jeff Schafer remains confident the brand will manage to arrest its sales slide despite a weakening economy that's likely to slow new-car sales in 2025.

Speaking to CarsGuide at the international reveal of the Terramar in Spain, Schafer explained how the brand’s line-up of refreshed and entirely new products will bolster next year's numbers.

“We’re really excited about the new phase of Cupra products in 2025. We’re quite confident, but the economy always plays a role.

“When people are uncertain about the economy and repayments on their mortgage, they put off these sorts of purchases. We’re looking forward to the economy being more stable. It goes in cycles and we’ll be ready for the next turn.”

Schafer said the brand’s strategy thus far in not directly targeting or benchmarking rival brands, but instead certain buyer profiles has been key to success given the unique sporty semi-premium positioning.

“There’s definitely conquest for buyers coming out of traditional luxury brands. Those customers coming to Cupra are looking for design and performance.”

Does a Cupra customer come from any particular brand? It’s a resounding and intentional “no” according to Schafer, who adds you might be surprised who is getting into a sporty Spanish car.

“We look at the data to try to understand where the sources are. It’s helpful to know, but we don’t set out to target other brands. Cupra wants to set its own path, and we believe that if we make that appealing it will attract customers.

“You always have a sense in your mind of who the buyer is, but it’s too narrow just to think in those terms. We’re seeing cross-shoppers that, to us [as enthusiasts], make no sense.”

He inferred that buyers were considering everything from BMWs to options from new Chinese players like BYD and Zeekr.

“This is why we don’t target demographics or rivals, but a mindset, people who want to keep that driving spirit into the age of electrification. It doesn’t matter if they are 20 years older than what you expect, if that’s where they see themselves, that’s who we can appeal to.”

Interestingly though, this doesn't mean an awful lot of crossover with other VW Group brands like Volkswagen or Audi, with Schafer adding buyers were coming from “predominantly elsewhere”

Conquest buyers (those who have come from outside VW Group in terms of their previous car) are said to be a much higher share in Australia than the internationally quoted 50 per cent.

“People are looking for different things. We want the customer who is all about driving. Someone who has that product represent something about them. Other brands [in the VW Group] appeal in a different way.”

Schafer said that while the slowing economy would continue to have an impact on Cupra's buyer group, it will continue to lure in new buyers as its network expands from a base of nothing in 2022.

“We’re new to the market — it takes time to establish recognition. We’ve had a few buyers look at cars and they’re waiting for the network to expand. That will open us up to new customers who are interested in having an agent or service point that’s a bit closer by.”

“We’re expanding the model range and network to cover the population of Australia — we’ve just opened up in Tasmania and Brisbane [since the initial launch phase]”

Physical locations are a strong part of Cupra’s branding, not just in Australia, but internationally. Its dealerships look more like apparel shops than the kind of traditional overly-lit and glossy show-floor experience. This strategy differs from other newcomer brands, like Polestar, which have opted for a predominantly online presence.

“Part of it is being exposed to the market and making sure people can actually consider Cupra when they’re shopping” Schafer said, “We need new locations so people can actually meet the new product — in busy areas with lots of dealers. Next year, we’ll be able to have all the new models in one showroom. We think that will be quite compelling.”

Schafer says physical locations are particularly important, not just because of cross-shopping, but also because the brand’s conversion rate from test drive to sale is above market average.

“Once people have experienced the car, a large number of them go on to buy. The experience is key, and we need more locations to be able to do that.”

Cupra’s range will look entirely fresh in 2025 with showrooms being graced by the deeply facelifted Leon hatch or wagon, Formentor crossover and new variants of the Born hatch and Ateca small SUV. It will also see the introduction of two vehicles in the mid-size category, first the Tavascan fully-electric mid-sizer before the end of 2024, then the Terramar combustion and hybrid SUV, scheduled for release in Q3 of next year. 

Further down the road, Cupra will add the Raval electric hatch to sit below the Born and a large electric SUV designed to be instrumental in its US-market launch.

Still, the brand will have a fight on its hands. Not necessarily with established rivals, but with a litany of newcomers from China, some of which are targeting a similar upper-mid market positioning, particularly the likes of Geely’s Zeekr sub-brand and aggressive EV-only player, Xpeng.