German Manager Magazine: Model changes and weak sales depress Porsche profits003457

The model change in important series and the weak sales China press at the sports car manufacturer Porsche on the win. An operating result of 3.1 billion euros was achieved in the first half of the year, around a fifth less than a year ago. The second quarter was stronger than the start of the year, said the Volkswagen-Daughter on Wednesday with me.

Financially, the DAX group has picked up speed again after a cautious start to the year. CFO Lutz Meschke said that Porsche was in a financially robust position and that the sales structure was balanced. “This enables us to largely absorb fluctuations in individual markets.”

Sales fell by almost five percent to 19.5 billion euros. The return on sales improved to 17 percent in the second quarter. For the entire first half of the year, there was a return of 15.7 percent, which is 3.2 percentage points less than a year ago. However, according to data from LSEG, analysts had expected an even sharper decline in the margin to 15.3 percent.

In recent months, Porsche has brought revised versions of the Panamera, Taycan and 911 models onto the market, as well as the electric Macan. This drives up the costs for development and sales.

China is causing problems

In addition, there is lower demand for luxury cars in China. The Stuttgart sports car manufacturer sold seven percent fewer vehicles in the first half of the year, with almost 156,000 vehicles, mainly due to a drop of a third in the People’s Republic. The world’s largest car market is under pressure because of the weak economy and strong competition. Porsche does not want to respond to this with increasing discounts, but is pursuing “value-oriented” sales. Model changes in four of the six model series this year are also putting a strain on business.

Porsche is also preparing for production downtimes in the second half of the year. On Tuesday night, the company cut its forecasts for sales, profits and returns. Because a factory belonging to an important European aluminum supplier was flooded, aluminum parts that Porsche uses in all model series were missing. This is apparently the factory of the US manufacturer Novelis in Valais, Switzerland. A company spokeswoman said it was not clear when it would be fully available again.

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