Key facts
- Porsche aims to lower its break-even sales point to under 200,000 units.
- The company plans to cut 9,000 positions by 2035, reducing its workforce by a fifth.
- Porsche's profit margin collapsed to 1.1% last year.
- Deliveries have slumped by almost 10% globally since 2022.
- CEO Michael Leiters is pursuing a 'value over volume' strategy.
Porsche is preparing for a period of persistently lower sales, implementing a turnaround plan focused on boosting profit margins by emphasizing its top-end models. The sports car maker aims to reduce its break-even sales point to fewer than 200,000 units, a significant decrease from last year's deliveries of 279,449.
During a capital markets day, CEO Michael Leiters is set to reassure investors about the strategy, which prioritizes high-margin vehicles like the 911 and luxury SUVs. This shift comes as Porsche, like its parent company Volkswagen, grapples with weak demand, particularly in key markets like China, and tariff challenges in the United States. Deliveries have already fallen by nearly 10% globally since 2022.
Porsche's profit margin last year dropped to 1.1%, a stark contrast to the double-digit, Ferrari-style margins targeted at its 2022 IPO. The company is also cutting 9,000 positions by 2035, representing a fifth of its workforce, amid broader job losses in the German automotive sector. Leiters is advocating for a 'value over volume' approach, including a pivot back to combustion-engine models after perceived missteps with electric vehicles under his predecessor, Oliver Blume. To further cut development costs, Porsche plans to increase platform-sharing with Audi.