Weissach (Germany) (AFP) – Luxury sports car maker Porsche announced Wednesday it plans to sell fewer vehicles, but at a higher price to try to regain profitability hit by competition from China. The subsidiary of Volkswagen, which is itself struggling, aims to lower its break-even production point to fewer than 200,000 vehicles per year. This new strategy for the years up to 2035 was presented at the firm’s development centre in Weissach, southwestern Germany.
In 2025, Porsche delivered nearly 280,000 vehicles, 10 percent fewer than in 2024. Now, it aims to increase the average selling price of high-end models by around 20 percent in the medium term. Porsche saw its profitability slump to 1.1 percent last year — an unprecedented low for a manufacturer of ultra-luxury vehicles. Now it is looking to accompany its move upmarket by slashing costs.
Faced with slumping sales in China and weaker-than-expected demand for electric cars, Porsche wants to cut its workforce by a quarter by 2030. It has already announced 9,000 job cuts. On Wednesday, the company added that it also intended to cut 40 percent of management posts to streamline decision-making. With China deliveries down almost a third in the first half of this year, CEO Michael Leiters told reporters he wanted “a smaller but stronger and more resilient business.”
China once accounted for more than a third of Porsche sales, but that share has dropped to nearer 15 percent and is expected to decline further. As a result, the carmaker is set to significantly reduce its dealerships in the country from more than 150 to nearer 80 by the end of 2026. With global demand for electric vehicles slowing, Leiters said Porsche would continue to invest in internal combustion engines and plug-in hybrids. It would continue investing in electric technologies, he added, while insisting there would be no “turning our backs on electric power.” The legendary Porsche 911 “will never be electric”, he said.
Porsche shares rose more than four percent in early trading Wednesday but then fell back and were down around 0.7 percent shortly before midday (1000 GMT).
© 2024 AFP
