(Bloomberg) -- Volkswagen AG is set to finalize plans this year to turn its mass-market Seat nameplate into a micromobility platform as it continues to ready its sporty offshoot Cupra for a US launch.

The transformation of the unit, which makes the Leon hatchback and Ibiza compact car, will expand a range of electric scooters and rental services called Seat Mo, Seat Chief Executive Officer Wayne Griffiths said in an interview in Barcelona.

“I see an alternative in the cities to cars and also, perhaps, an alternative to privately owned cars and more subscription and sharing,” he said.

The plans for Seat indicate how VW is reshaping its 10-brand offering spanning affordable models to Bentleys and Lamborghinis in the age of battery power and tech gadgets. Last year, VW listed Porsche AG with the maker of the 911 sports car now Europe’s most valuable carmaker. It also closed a deal to buy Europcar to expand mobility services.

VW fell 0.4% in early trading in Frankfurt after gains this year of 5.8%.

VW is investing €10 billion ($10.9 billion) to transform Seat’s facilities in Spain, including the Martorell and Pamplona plants, into a European hub that will make a range of EVs. Seat will also lead the development of VW group’s small electric models, where turning a profit is set to be challenging.

Seat, like other carmakers, is under pressure from increasingly strict European Union pollution standards for combustion-engine vehicles, saying they would cost about €2,000 per car to implement. This may make a range of models obsolete as the cost of complying with the regulation will be too high, Griffiths said.

The unit last year made just shy of 480,000 vehicles with an operating profit of €179 million. Its Cupra brand, founded in 2018 with models including the Formentor, doubled sales to nearly 153,000 cars last year, with plans for more growth via new all-electric models next year and in 2025. The mid-term goal is to sell 500,000 cars annually.

US Entry

Cupra is planning to sell a range of electric vehicles in the US and compete with the likes of Tesla Inc., Griffiths said. Entering the market would require a manufacturing facility in the region, he said.

“We could be a successful niche brand because we see other brands who are our competitors in Europe also making steps toward the US,” he said, referring to Renault SA’s plans to launch its Alpine sports car. “If we want to be looking at the US before the end of the decade, then we need to make decisions on product now.”

(Updates with share price in fifth paragraph)

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