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Porsche Posts Sharp Rise in Operating Profit, but Revenue Drops

German luxury sports car manufacturer Porsche increased its operating profit for the January-to-September period to €1.74 billion, up from just €40 million a year earlier, when the company’s results were hit by substantial one-off costs linked to scaling back its electromobility plans. However, revenue fell year-on-year by approximately six percent to €25.3 billion, according to a press release issued by the company today.

Fewer Cars, Higher Prices: Porsche Pivots to Luxury Amid Sales Slump

Porsche had previously announced that its deliveries in the first three quarters of this year fell by 16 percent year-on-year to 178,532 vehicles, driven primarily by weaker demand in China, where sales plunged 33 percent to 21,493 units. Earlier this month, Porsche unveiled a new strategy that includes significant cost-cutting measures. The company also stated that it intends to place less emphasis on sales volumes and focus instead on high-end luxury vehicles. In the future,it aims to sell fewer cars at higher prices.

Under the new strategy, Porsche aims to ensure profitability even with annual sales volumes below 200,000 vehicles. For context, it delivered 279,449 vehicles to customers over the course of last year. “We are establishing the groundwork for Porsche to become a stronger, more profitable enterprise in the long run,” CEO Michael Leiters stated in today’s press release. Porsche listed on the Frankfurt Stock Exchange in 2022. However, German automotive giant Volkswagen Group, which also includes Škoda Auto, remained its majority shareholder.

For a long time, Porsche served as a dependable profit driver for Volkswagen Group. Today, however, analysts view it more as a drag on the group, falling into the shadow of Škoda Auto. “The Czech brand is effectively becoming the group’s new Porsche,” independent automotive analyst Matthias Schmidt remarked last month.

VW’s Historic Overhaul Hits Central Europe: 100,000 Job Cuts Spark Wage Clash at Škoda

Volkswagen Group has recently been grappling with a host of headwinds, including high costs, excess capacity,intensifying competition from China, and U.S. tariffs. In September, Volkswagen’s supervisory board approved the largest restructuring plan in the company’s history. Among other measures, the group plans to eliminate up to 100,000 jobs worldwide by the end of the decade and trim its model portfolio. At the end of last year, Volkswagen Group employed approximately 663,000 people.

According to the Czech trade union KOVO, Volkswagen is also demanding a wage freeze for Škoda Auto employees through 2030. The union has rejected the demand, which it says extends to other compensation components, including bonuses and premiums. Škoda Auto previously stated repeatedly that the group’s new transformation plan has no direct impact on its operations.

Škoda Auto ranks among the largest employers in the Czech Republic. Across its three Czech manufacturing plants in Mladá Boleslav, Kvasiny, and Vrchlabí, it employs roughly 36,500 people, including agency workers.