Porsche AG’s first-quarter sales fell after a steep drop in China, where luxury spending remains subdued, compounding pressure from model transitions and slowing demand for electrified cars in the US.
Global deliveries slumped 15 per cent in the period, dragged down by a 21 per cent decline in China, Porsche said on Friday. European luxury brands are grappling with fierce local competition and an erosion in pricing power in the worlds’ biggest car market.
The phaseout of combustion-engine versions of Porsche’s entry-level 718 sports car and comparisons with last year’s launch of the Macan electric SUV also weighed on performance.
The global sales downturn is forcing Porsche to rethink its strategy. Chief executive officer Michael Leiters, who started in January, is planning further job cuts and weighing additional high-end models above the 911 to bolster margins.
The German manufacturer is also scaling back spending on electric vehicles after an overly ambitious push.
In China, Porsche and its European peers face a structural shift, with competition from the likes of BYD Co. and Xiaomi Corp. intensifying. Its deliveries there fell to 7,519 units, and the brand now sells more cars in Germany than in its former top market. Current volumes are about 73 per cent below its post-pandemic peak during the third quarter of 2022. Porsche is scaling back dealerships in China as a result.
Porsche shares declined as much as 1.4 per cent in Frankfurt. The stock is down 13 per cent this year.
The challenges extend across parent Volkswagen AG, with the Skoda brand set to exit China after a prolonged sales slump as buyers shift to locally made EVs. Porsche’s peer Mercedes-Benz Group AG earlier this week also reported declining deliveries in China.
Porsche’s US sales also fell in the first quarter, which it attributed to a high base from stronger Macan EV volumes during last year’s launch period and the end of EV buying incentives.
Germany was a bright spot, with sales rising 4 per cent, while global deliveries of the flagship 911 increased by more than a fifth, led by higher-margin Turbo and GTS variants.
Porsche’s outlook faces fresh pressure closer to home, with Chinese automakers increasingly targeting Europe’s premium segment.
