Porsche flags cost cuts as China weakness, slowing electric-vehicle shift hits profits

LUXURY sportscar maker Porsche on Friday (Oct 25) warned it may cut costs after a slower-than-expected transition towards electric vehicles and persisting weakness in the Chinese market caused nine-month operating profit to fall by more than a quarter.

“For this reason, we are reviewing our product line-up and ecosystem, as well as our budgets and cost position. All with the aim of increasing our flexibility and resilience even further,” Porsche chief financial officer Lutz Meschke said.

Porsche, which is majority-owned by Volkswagen, said nine-month operating profit declined by 26.7 per cent to 4.04 billion euros ($4.37 billion), while sales for the period came in 5.2 per cent lower at 28.56 billion euros.

In China, Porsche’s single most important market, the group is facing what Meschke called a “structural shift in demand”, a reference to continued weakness in the world’s biggest car market that has hit all European carmakers.

Third-quarter operating profit fell 41 per cent to 974 million euros (S$1.4 billion), below the 1.08 billion euro LSEG estimate, while sales for the period fell to 9.1 billion euros, resulting in an operating margin of 10.7 per cent. REUTERS