Porsche’s China sales slump 21% on muted luxury demand
The manufacturer is shaking up its leadership and cutting jobs as part of a broader effort to get back on track
[BEIJING] Porsche’s sales in China fell 21 per cent during the third quarter, as luxury demand in the country remains weak and local manufacturers dominate on electric vehicles.
The drop held back the 911 maker’s global shipments, which declined 5.7 per cent to just over 66,000 vehicles in the period. Mercedes-Benz Group and BMW also reported waning deliveries in China this week, highlighting the troubles of Germany’s export-focused auto industry.
Western manufacturers are losing ground in the world’s biggest car market to homegrown rivals such as BYD and Xiaomi, whose feature-packed EVs are undercutting them on price.
Fierce competition in China is squeezing profit margins, while a real estate slowdown is capping luxury demand. BMW earlier this week lowered its earnings forecast, citing the China slump and costs related to US tariffs.
Weak demand for luxury EVs is hitting automakers already dealing with muted growth in Europe. All of them have corrected course by cutting costs or shifting funds back into combustion-engine and hybrid models.
Ferrari believes it can buck the trend with its first fully electric model, which the Italian company will start to unveil on Thursday.
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Porsche has struggled to live up to expectations since its blockbuster 2022 listing, with duties in the US – its single biggest market – also taking a toll.
The company last month cut its guidance for the fourth time this year after pushing back the introduction of new EVs and spending more on petrol and hybrid models. Porsche’s shares have dropped around a quarter this year.
To get back on track, the manufacturer has replaced several executives and is slashing costs, including via job cuts. It has ditched a plan to produce its own batteries due to weak EV demand. Porsche’s third-quarter deliveries in North America fell by 4.8 per cent.
The sports-car maker’s troubles are increasingly catching up with its parent. Volkswagen has already walked back some of its more ambitious battery plans and is undergoing a major restructuring to reduce costs. Porsche’s EV pivot forced the parent to also cut its outlook.
Oliver Blume, chief executive officer of both companies, is under pressure from investors to relinquish the Porsche role and allow someone else to turn the brand around.
The search for a new leader has begun, Bloomberg News reported in August, with the Porsche-Piëch owner family holding discussions with potential candidates. BLOOMBERG
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