Porsche braces for lower sales era, seeks lifeline from luxury

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Follow your favorite stocksCREATE FREE ACCOUNTMichael Leiters, CEO of the Stuttgart-based sports car manufacturer Porsche, stands next to a Porsche 911 GT3 SC at the Porsche Development Center.Bernd Weißbrod | Picture Alliance | Getty Images

Porsche is steeling itself for persistently lower ​sales, the Volkswagen brand said ​on Wednesday, pitching ​a turnaround plan to investors that aims to boost margins with a focus on top-end models.

The sports car maker, which like parent Volkswagen is undergoing restructuring to address weak demand ⁠and ‌high costs, said it would lower its future ⁠break-even point to fewer than 200,000 units, compared with total deliveries last year of 279,449.

Porsche has already seen deliveries slump by almost 10% globally since the year of its blockbuster listing in 2022, as plunging ‌demand in China and tariff woes in the United States hit two of the brand's most important markets.

During a capital markets day ​at the company's development center in Weissach, CEO Michael Leiters will seek to assure investors that a focus on high-end sports cars like the 911 and luxury SUVs will put the carmaker back on track.

Its profit margin ⁠collapsed last year to 1.1%, a fraction of the double-digit, Ferrari-style margins targeted when the Stuttgart-based ‌carmaker went public four years ago under Oliver Blume, ‌Leiters' predecessor.

Blume remains CEO of Volkswagen, where he is battling with unions to push through a drastic overhaul of the German auto group, including some 100,000 layoffs worldwide and the closure of ⁠up to four German plants.

Porsche for its part is cutting 9,000 ⁠positions by 2035, reducing its total workforce by a fifth, as ⁠job losses mount in the German automotive industry under pressure from low-cost Chinese rivals.

Leiters is pursuing a "value over volume" strategy and pivoting back to ​combustion-engine models after costly missteps on EVs ‌under Blume.

He also hopes to cut development costs by increasing platform-sharing with fellow Volkswagen brand Audi, the company said on Wednesday.

"The ultimate goal is to further strengthen our unique sports car brand — across all model lines and with new, highly desirable models in particularly high-margin segments," Leiters said. "At the moment, the ‌main focus is on reducing costs and making the company more financially robust."

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