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Porsche warns profit margins will fall as it refreshes line-up

Luxury-car maker investing in new models, including a hybrid version of 911 model

A worker assembles a Porsche Macan in Leipzig, eastern Germany. The carmaker has warned its profits would be squeezed this year as the luxury sports-car maker prepares to launch new models. Photograph: Ronny Hartmann/Getty

Arjun Neil Alim and Patricia Nilsson
Tue Mar 12 2024 - 12:31

Porsche warned its profits would be squeezed this year as the luxury sports-car maker prepares to launch new models, including a hybrid version of its 911.

The German group said on Tuesday that its operating margin would be between 15 and 17 per cent in 2024, down from the 18 per cent it achieved in 2022 and 2023.

“We’re laying the groundwork in 2024 for a flying start in 2025,” said chief financial officer Lutz Meschke, who added that Porsche was still targeting a profit margin of 20 per cent over the long term.

Shares in Stuttgart-based Porsche were down 4 per cent in early trading on Tuesday, taking their drop over the past 12 months to a quarter.

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Analysts at Citigroup called Porsche’s guidance on margins “disappointing” and that while the carmaker needed to refresh its line-up of models, generating a return on its investment was likely to “take time”.

The outlook came as Porsche reported an 8 per cent increase in sales to €41 billion, as the widespread shortage of semiconductors that hit the car industry after the pandemic continued to ease.

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The carmaker last year warned that luxury brands were not immune to subdued spending by consumers, as the company flagged that it would continue trying to sell more expensive cars in China amid lower sales.

The company said it was “committed” to continue selling internal combustion engine cars in the future, alongside plug-in hybrids and fully electric cars – which it expects 80 per cent of deliveries to be by 2030.

But Porsche last year called for the exemption of cars that run on synthetic fuels from the European Union ban on combustion engine vehicles by 2035, arguing that so-called “e-fuels” could be a good alternative for the millions of combustion engine cars that will remain on European roads for decades to come. – Copyright The Financial Times Limited 2024

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