Porsche is well known for being one of the most profitable carmakers in the world, but even it can’t shake off global trade headwinds. The sports car maker posted a 6.7% decrease in sales revenue to €18.16 billion (RM88.92 billion) in the first half of the year, but the big news is a massive 67% drop in operating profit to just €1.01 billion (RM4.95 billion), despite record deliveries in North America and “overseas and emerging markets” (i.e. outside of Europe, North America and China).
According to chairman Oliver Blume, this alarming slump is due to three factors – a sharp decline in demand for premium and luxury cars in China, new tariffs imposed by US president Donald Trump and unexpectedly low demand for electric vehicles, the latter putting strain on Porsche’s suppliers. “Looking ahead, the movement of the [US] dollar could also have an impact,” he said.
Expenses stemming from its significant product strategy and business realignment announced earlier this year are dragging the company’s bottom line, costing it €200 million (RM979 million) with a further €500 million (RM2.45 billion) on so-called “battery activities”. It had to expend a further €400 million (RM1.96 billion) to offer US customers price protection against the aforementioned tariffs.
Blume added that Porsche will continue to face challenging economic conditions in the foreseeable future. “This is not a storm that will pass. The world is changing dramatically – and, above all, differently to what was expected just a few years ago. Some of the strategic decisions made back then appear in a different light today.”
As a result, the company is pushing ahead with further cost-cutting, including a second “package of measures” (read: more huge job cuts) being negotiated with employee representatives. “These measures are expected to have a positive impact on earnings and cash flow in the coming years,” said executive board member for finance and IT Jochen Breckner.
Porsche is also adjusting its financial forecast for the year to include the just announced 15% US tariffs on European goods, expected to come into effect next month. The company now expects a total sales revenue of between €37 billion and €38 billion (around RM18 billion), a decrease of €1 billion (RM4.9 billion), while the return on sales is now much lower at between 5 and 7% (down from 10 to 12%, and way lower than its goal of more than 20%).
On the bright side, Blume said this year will be the lowest of the low and the company expects “we will begin to see positive economic momentum again from 2026 onwards.” He added that Porsche’s recently renewed product lineup is “very well received by our customers” and that its shift towards adding more combustion-engined cars to its portfolio from 2028 onwards will enhance its market positioning and underpin sustainable long-term growth.
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Porsche’s brother, Audi is doing even worse. Almost all brands under VW are slumping.
This is crap, oh dear.. a half year profit of RM4,950,000,000.00 .. get real, it is still a massive profit. First world problem this
Lol still profit. Bising apa.
butthurt coz the Chinese are getting more pcs of pie.