The sports car manufacturer Porsche has to go in due to persistently poor business China Accept losses in sales and profits. In the first nine months of the year, the operating result fell by 26.7 percent to 4.04 billion euros, as the DAX group with CEO Oliver Blume (56) announced on Friday. Sales fell by around five percent to 28.6 billion euros, so that the return fell further to 14.1 percent. The declines increased compared to the first six months. The profit per preferred share traded in the Dax fell by almost 30 percent to 3.04 euros.
Based on known data for the first half of the year, this results in a margin of a good ten percent for the third quarter. “As expected, the third quarter is the weakest of the 2024 financial year,” said CFO Lutz Meschke (58). “In the fourth quarter we assume that we will be able to accelerate again and start the final spurt.”
Annual targets confirmed
The company, which is majority owned by the VW Group, maintained the annual targets that were lowered in July due to problems at an aluminum supplier. Porsche wants to generate sales of 39 to 40 billion euros. 14 to 15 percent of this should remain as operating profit.
The decline in profitability – which is still high throughout the industry – is due to the renewal of four of the six series. Models before the new edition sell less well. Added to this was the surprisingly sharp decline in the market for combustion cars in China and the weakening demand for electric cars in Europe and the USA, which met the first electric model Taycan at Porsche. In the year to date, sales have fallen worldwide by seven percent to 226,000 vehicles – the strongest in China with a decline of 29 percent. Wealthy customers there have less money to spare because of the country’s real estate crisis.
“In China we are dealing with a structural change in demand,” explained Meschke. In addition, the transformation to electric vehicles is happening more slowly globally than originally assumed. “For this reason, we are currently reviewing our product range and ecosystem, but also our budgets and cost position. “The aim is to increase flexibility and resilience. Porsche wants to continue to pursue the strategy of imposing high prices, even if this comes at the expense of sales. This particularly applies to the highly competitive Chinese market.
The company is planning a billion-dollar cost-cutting program
The car manufacturer Porsche expects lower sales in China for a longer period of time and is therefore planning a billion-dollar program to reduce costs. “In the future, we can no longer assume that China will get back to where it was for European providers,” said Meschke on Friday. “The market is not abandoned, but we are dealing with the realities.” Porsche is not assuming that the situation will improve in the next one or two years and will go back to “the good old world of combustion engines.” At the same time, things are running The transition to electric cars worldwide is slower than previously expected.
For Porsche, according to Meschke, this means that sales will be 250,000 cars a year for a long time instead of the previous figure of more than 300,000. The cost basis must be adjusted accordingly. With a double-digit decline in all cost items, a significant amount will be achieved by 2030. “These are high billions.”