Porsche, the carmaker, is becoming one of the Volkswagen Group’s biggest problems and is fading into the shadow of the Czech brand Škoda. Reuters writes, as reported by UNN.
Porsche, the manufacturer of luxury sports cars that was long Volkswagen’s most reliable source of profit, has become its biggest problem, creating an obstacle to CEO Oliver Blume’s restructuring plans at Europe’s largest automaker
Less than four years after its record-breaking stock market debut, Porsche has become a symbol of the problems facing the entire group: the company has lost its leading position in what was once a profitable Chinese market and suffered losses because of costly miscalculations during the transition to electric vehicles.
On Monday, thousands of workers protested against cuts at car plants across Germany, and this crisis extends beyond Porsche and the rest of Volkswagen’s sprawling empire, reflecting how Germany’s automotive sector is coming under pressure from Chinese competitors and U.S. tariffs.
On Friday, Volkswagen issued another profit warning, linking it to a €6 billion write-down on its 75% stake in Porsche - just weeks after approving extensive job cuts as part of the largest restructuring in the group’s 89-year history.
The write-down, which followed a €2.7 billion impairment a year earlier, points to a lack of proper oversight at Volkswagen, Jefferies analysts wrote, noting that, in their words, these were "endless surprises related to putting things in order."
Volkswagen attributed the write-down to poorer financial forecasts for Porsche, which made a high-profile stock market debut in 2022 in one of the largest IPOs on the continent in recent years.
In an internal memo seen by Reuters, Porsche CEO Michael Leiters stressed that the company remains committed to its medium-term profitability target of between 10% and 15%.
However, looking ahead, the company’s withdrawal from China, where it has reduced the number of dealerships, and pressure on its U.S. business from tariffs are raising questions about sales volumes.
Porsche has reportedly been going through difficult times for years, and Blume, who is leading the sports-car brand until the end of 2025, will oversee it during a crucial downturn while simultaneously serving as CEO of the group.
We remind you
Porsche has unveiled the 911 Challenge - a full-fledged race car costing $275,000. It is cheaper than the 911 Turbo S convertible, whose starting price is $284,300.