Porsche AG reported its weakest quarterly profit since it went public in September 2022, weighed down by model changes and weak demand in the Chinese market. According to the subsidiary of Volkswagen AG, operating profit dropped by 30 percent to 1.28 billion euros, which is partly due to the reluctance of Chinese buyers and customs clearance problems in the United States.
The company treated the beginning of the year as a low point, but the management is confident that the four renewed models, including the electric Macan and Cayenne SUVs, will give the company momentum starting from the second half of the year. According to CFO Lutz Meschke, thanks to these updates, the company will make significant progress.
Porsche’s yield fell to 14.2 percent, which falls short of the 15-17 percent annual target predicted by the company.
Despite the disappointing figures, the Zuffenhausen-based carmaker still insists that annual revenue could reach 42 billion euros.
The launch of the new Panamera and Taycan models and significant investments in digital products also put pressure on the results. In particular, Porsche’s biggest market, China, experienced a significant drop in sales. Deliveries in the Eastern superpower fell by 24 percent in the first quarter. Analyst Stephen Reitman pointed out to Bloomberg that we should see more evidence of management’s ability to stabilize the company’s position in China and manage processes effectively.
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