Crisis in the auto industry: after slump in profits: these are the construction sites at Porsche

The sports car manufacturer Porsche is anything but round. The surplus of the group was sunk by a good 30 percent last year to around 3.6 billion euros. This was among other things due to the weakening China business and high costs for the renewal of several model series. Important financial goals should not be reached until the end of the decade.

Porsche therefore wants to save more and adapt its corporate structures. Job cuts included. “The numbers reflect the high tension under which the entire automotive industry acts,” said Porsche boss Oliver Blume when presenting the year in Stuttgart. In the long run, higher ambitions are made. However, it should take a while before the traditional company is back on track. What are the biggest construction sites?

E-mobility and combustion extension

The auto industry is in the crisis in view of the weak economy and suffers from a lack of demand – especially according to electric cars. Also Porsche. Despite the delay, flower continues to consider e-mobility as the technology of the future. “We want to lead them to success in the long run.”

However, the company is currently expecting a significantly longer phase of the transition. In 2024, 27 percent of the approximately 310,700 Porsche vehicles delivered were electrified-almost half of which were pure electric cars, the other plug-in hybrids. This proportion should continue to increase in the future. Blume no longer calls concrete goals. Porsche currently has two fully electric models on offer, others are planned.

Porsche originally wanted to deliver more than 80 percent of his vehicles with a pure electric drive. This was one of the most ambitious plans in the entire industry, said Blume. According to him, Porsche has the products for this. “In view of the market development, it is no longer realistic.”

It has been indicated for some time that Porsche rings back on the electric goals. It was only in February that the group announced that it was still offering models with electric drive and combustion engines in parallel for years. Among other things, Porsche must take up to 800 million euros in hand in 2025. This will burden the business figures. “We accept that. Because we are convinced so that in the long run to have set the course correctly,” said Blume.

Sales problems in China

In China, the rapid change towards electromobility and the advent of local manufacturers who aggressively push into the market becomes increasingly a problem for western car companies. In addition, wealthy customers have less money for expensive cars due to the real estate crisis in the country.

Porsche gets this competition to feel. Numerous providers are fed in the People’s Republic a bitter struggle for customers, which leads to high discounts. The luxury manufacturer therefore emphasized again and again to rely on a “value -oriented paragraph”. You won’t follow prices.

This can be seen in the sales figures. The sales to the People’s Republic broke up by 28 percent to 56,900 in 2024. The business is currently only at half of the level that Porsche once planned, said Blume. From today’s perspective, the changes in the market are long -term.

High costs and job cuts

Because of the weakening sales figures, Porsche gets the costs out of hand. Works are not busy. Layers have already been reduced. The group now wants to strengthen its savings efforts – and adapt the structures to a paragraph of 250,000 vehicles. The red pencil is therefore also scheduled for personnel. By 2029, around 1,900 positions are to be eliminated in the Stuttgart region. All areas are affected – from development to production to administration. 2,000 contracts by temporary employees were or are not extended.

The savings program also includes a lid for the bonus of the employees. Management also wants to make a “significant contribution” to the savings volume, as it was already said in February. But that should not be enough: for the second half of the year, management has already announced discussions with the works council about further austerity measures. You will also look at the personnel costs, said the new CFO Jochen Breckner. There should only be further details after the talks.

Until the end, it was unclear whether areas should also be painted in the Leipzig Porsche plant. Blume did not give any concrete figures on Wednesday. But: “Of course, we also do the cost programs that we carry out in the entire company in Leipzig,” said the manager, who is also VW boss. There they have many employees with temporary contracts. You will therefore see from year to year what needs you have.

In the future US criminal tariffs on cars?

Another danger to Porsche’s business is currently lurking in America. US President Donald Trump recently threatened tariffs of 25 percent for imports from the European Union – “for cars and all other things”.

This could become a big problem for the Swabians. Precisely because the China business is weakening, the North American market becomes even more important. In 2024, more than every fourth Porsche vehicle went there. How many of them were delivered to the United States – and not to Canada and Mexico – does not show from the numbers. But it should be a large part.

The Porsche engineers are also developing an SUV that is even larger than the current top model Cayenne-and thus particularly aimed at the US market. Unlike manufacturers such as Mercedes-Benz, BMW and the group mother Volkswagen, the Swabians have so far have no production in the USA. So far, they have only produced in Europe.

Porsche would be particularly affected by possible import tariffs. Most recently, there was also speculation about whether the company could also manufacture in the United States in the event of an event. Possibly at a VW location. Breckner was covered: you watch the situation carefully and be prepared. It is also checked where possible tariffs can be passed on to customers in order not to put too much burden on Porsche’s profitability.