Audi is studying whether to absorb its troubled Spanish unit, SEAT. The upscale VW brand - which leads a group of brands including SEAT and Lamborghini - is uninterested in selling or shutting down its Barcelona-based brand. However, Audi is expected to fold SEAT's business into its own as a cost-saving measure, which would give Audi's executive board more control over SEAT's expenditures, vehicle development and production. A decision is expected by November.

FRANKFURT -- German premium carmarker Audi AG may take direct control of Spanish brand Seat under a plan to be put to the board of parent Volkswagen next month, a source close to the situation said on Thursday.

He was confirming a report in German magazine Capital, which said Martin Winterkorn -- both Audi brand group head and Audi AG chief executive -- wanted to change the struggling Spanish brand's strategy and run Seat operations and finances.

The goal is to focus Seat more on making efficient, sporty and environmentally friendly cars and thus reverse a sales slump that has forced it to adopt drastic cost-cutting plans, the magazine said without giving a source for the information.

"What is in Capital is one of the conceivable solutions," the industry source said on condition he not be identified.

Audi AG declined comment on the report.

Seat is owned directly by Volkswagen and is a part of VW's operational division Audi brand group, which also comprises the Audi and Lamborghini nameplates.

Nevertheless, Seat CEO Andreas Schleef sits on Audi AG's management board, which Winterkorn also chairs.

Winterkorn said in a newspaper interview earlier this month that Seat would be realigned shortly but will not be sold or shut down.

Seat workers said on Wednesday they had a called a half-day strike to protest against the company's plans to cut wages and working hours or cut staff to combat falling demand.

Seat, which says it has around 1,400 surplus workers, has proposed a 10 percent reduction to the working day and a proportional wage cut for all 16,000 employees.

Seat's sales dropped by 5.3 percent in the first nine months of the year to 271,000 units, while its market share shrank to 2.4 percent from 2.6 percent.