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Revenue and sales fell, and it was revealed that Porsche was asked to slow down electrification

2024-07-18 Update From: AutoBeta NAV: AutoBeta > News >

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According to foreign media reports, Porsche shareholders have called for a slowdown in the pace of electrification as the slowdown in the global electric vehicle market threatens Porsche's sales and profits. In addition, investors point to falling sales in China and problems with parts procurement as Porsche tries to make major changes to its product line, putting pressure on Porsche's share price.

As of press time, Porsche did not respond to the news.

The latest data show that Porsche's global market sales and revenue declined to varying degrees in the first quarter of this year. Porsche delivered 77640 new cars worldwide in the first quarter, down 4% from a year earlier, of which only 16340 were delivered in China, down 24% from a year earlier. The decline in sales also led to a sharp decline in Porsche's performance, with total revenue of 9 billion euros in the first quarter, down 10.8 per cent from a year earlier. Of this total, vehicle sales fell 12.7 per cent from a year earlier to 8.1 billion euros; gross margins in the automotive business fell 30.3 per cent to 23.4 per cent; and sales margins also fell to 14.2 per cent, down 4 per cent from a year earlier.

At the end of last month, due to the sharp drop in Porsche sales, the pure streetcar Taycan could not be sold. In order to alleviate the financial pressure, many dealers were forced to sell at a loss. Porsche China chose to press the warehouse to complete the sales task, resulting in great financial pressure on dealers, which intensified the contradiction. As a result, Porsche dealers in China launched a collective protest and boycott. In response to this news, Porsche China responded at that time: "at present, the automotive industry is undergoing unprecedented changes. Porsche China and its dealers are facing a number of complex problems, opportunities and challenges."

Data show that Porsche entered the Chinese market in 2001, and the Chinese market has become the largest single market in the world since 2015, refreshing its sales performance in the Chinese market for 20 consecutive years. But Porsche's sales in China have declined significantly since 2022. According to the data, the total delivery volume of Porsche in China from 2022 to 2023 was 93286 and 320221 respectively, down 2.5 per cent and 15 per cent respectively from a year earlier, while sales have also failed to stop falling since 2024. As for the decline in Porsche's sales, the industry believes that it has been under great pressure in the electrification transformation process and the slow pace of the launch of electric vehicle products.

There is no denying that Porsche's life in China is not as good as it used to be. In the past, Porsche was one of the most profitable companies in the auto industry, but as the transformation of electrification led to record spending on research and development and marketing, Porsche did not achieve eye-catching sales on pure trams, which led to its lagging behind in the Chinese market. Porsche's first all-electric sports car, the Taycan, went on sale in September 2019 with a price range of 89.80-1.838 million yuan. The new Taycan model, which is sold on the eve of the 2024 Beijing Auto Show, covers sports sedans and Cross Turismo bodies, with prices ranging from 103.8 yuan to 1.568 million yuan. Porsche's second all-electric car, the Macan EV, was not released until January this year, spanning more than five years, and the pace of product launch is extremely slow. In this context, in the face of more and more new car-building forces in the field of high-end electric vehicles, Porsche is gradually seizing the market share of traditional luxury brands.

As one of the representatives of luxury brands, Porsche's brand heritage is incomparable to many automobile brands at present. judging from the current product structure of Porsche, fuel vehicles are still the main selling models, and it is not clear whether they will bet on electric vehicles completely. however, with the reform of the car market, Porsche urgently needs to adjust its product strategy in order to flexibly cope with the rapid changes in the market. Earlier, there were media reports that competitors such as Mercedes-Benz were also slowing the pace of electrification due to weak sales demand. In fact, with the strong rise of independent brands with the help of new energy tracks, the competitiveness of traditional car luxury brands in the domestic market has declined significantly.

For Porsche, the Chinese market is now the world's largest single market, and if it is to maintain its position as a pioneer in the industry, it must lay down a territory in the highly competitive Chinese electric market. It is understood that at the upcoming annual shareholders' meeting, Porsche chief executive Oliver Blume will be asked "why it insists on its goal of accounting for more than half of electric car sales next year". As for Porsche shareholders' call to slow down the pace of electrification, there has been no official response as of press time.

It is worth mentioning that this year will be the year for Porsche to launch the largest number of new products, including Panamera, Macan, Taycan and 911, while the long-term goal is that more than 50 per cent of new cars delivered by Porsche will be electric vehicles by 2025; by 2030, more than 80 per cent of new cars delivered will be pure electric vehicles. How Porsche will respond to the rapid changes in the market, or whether it can find new growth opportunities in the Chinese market, is worthy of attention. After all, the Chinese market is still its largest single market in the world, which can not gain a foothold and face elimination at any time.

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