High costs plague the company
Earnings at Porsche collapse by 30 percent
April 26, 2024, 6:18 p.m
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At Porsche, sales and profits are shrinking significantly compared to the previous year. The Stuttgart car manufacturer sees the reasons for this in the sharply increased costs for research and development – and at the same time is counting on an improvement soon.
The sports and off-road vehicle manufacturer Porsche started the new year significantly weaker due to the renewal of several models. Sales from January to March shrank by more than a tenth year-on-year to a good nine billion euros, as the company announced. At just under 1.3 billion euros, the Group’s operating result was around 30 percent below the previous year’s figure.
Porsche boss Oliver Blume had already dampened expectations in March and spoke of a transition year. In 2024, the Zuffenhausen-based company will renew four of its six model series. According to Blume, this is the largest model offensive in the company’s history. New versions of the Panamera and the Taycan electric sports car as well as the fully electric Macan compact SUV are coming onto the market. The classic 911 will be refreshed in early summer. The new Cayenne, the best-selling Porsche model, was launched at the end of 2023.
Porsche is renewing four model series
The renewal of the model range has therefore caused a sharp increase in research and development and marketing costs. The process involves a lot of effort, Porsche CFO Lutz Meschke is quoted as saying in a statement. Investments and product launches today are tomorrow’s profits. “We gained significant momentum in the first quarter to lay the foundation for future success.”
The transition period between the model series is also reflected in the sales figures: As already known, the car manufacturer delivered 77,640 vehicles to customers from January to March – four percent less than a year earlier. The decline in sales is also due to problems in the most important car market, China, and in North America.
Porsche management is sticking to its already cautious annual targets – provided that the global economic situation does not deteriorate significantly. In 2024, the Zuffenhausen-based company expects sales of between 40 billion and 42 billion euros. The operating return, i.e. the proportion of profits in daily business to sales, should reach 15 to 17 percent – and therefore less than in 2023. In the long term, Porsche is aiming for a figure of more than 20 percent. In the first quarter the return was 14.2 percent.