Porsche prepares for era of lower sales and seeks exit in the luxury segment

The automaker, which, like its parent company Volkswagen, is undergoing a major restructuring to face weak sales and high costs, stated in its recovery plan that it intends to reduce the number of cars it needs to sell to less than 200,000 to balance its accounts.

Porsche's global deliveries have already fallen by almost 10% since 2022, the year in which the company went public. The drop in demand in China and tariffs imposed by the United States affected two of the brand's main markets.

During an investor event at the company's development center in Weissach, Chief Executive Michael Leiters sought to convince investors that a focus on luxury sports cars such as the 911 could get Porsche back on track.

Leiters, who took office at the beginning of the year with the mission of restructuring the company, stated that the strategy, at this moment, will be focused on reducing costs.

"We don't know what the next crisis will look like or where it will come from. That's why Porsche needs to be adaptable, efficient and resilient," he said.

Porsche has set a long-term operating margin target of 15%. In the medium term, in around five years, the expectation is to reach a margin between 10% and 15%.

The company's profit margin plummeted last year to 1.1%, far below the roughly 15% recorded when Porsche went public four years ago under the leadership of Oliver Blume. He left the command of the manufacturer, but remains executive president of Volkswagen.

Investors appeared to welcome the new strategy. Porsche shares rose 3.2% following the announcement.