(March 11): Porsche AG’s new CEO Michael Leiters plans to make the German manufacturer leaner and add models positioned above the 911 to bolster profits.
The moves are meant to counter tariffs, slumping sales in China and Porsche’s costly course correction on electric vehicles. Still, sales for this year are set to decline slightly to at best €36 billion, the luxury-car maker said Wednesday.
Porsche needs to make “hard decisions that are both necessary and vital to address our bloated cost structure”, Leiters said. “We must enhance our profit margins and cash flow generation.”
The CEO, who took over from Oliver Blume in January, is seeking to revive performance after a torrid year. The automaker fell out of Germany’s benchmark DAX index in 2025 as it cut guidance four times, moves that also hit Volkswagen AG. The parent on Tuesday warned that more savings are needed to deal with rising competition.
Porsche sees its operating margin reaching 5.5% to 7.5% this year, an improvement over last year’s 1.1%, when US duties and around €2.4 billion in charges tied to its EV strategy shift weighed on the result. The company previously said it expects improvements in 2026 after last year’s trough.
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To achieve that, Porsche will cut management layers as well as hierarchies and, in the long term, reduce investments, it said Wednesday. The manufacturer is looking at models and derivatives positioned above its two-door sports cars and the Cayenne sport utility vehicle to underpin margins.
Leiters is expected to engage labour leaders in discussions over a fresh round of savings measures. The company previously agreed to reduce headcount by some 3,900 people by the end of the decade, including 2,000 temporary workers.
Porsche’s sales in China slumped 26% last year after local competition intensified. The country’s economic slowdown has hit consumers across income brackets, with a protracted real estate crisis weighing on luxury spending. Porsche is currently downsizing its dealer network in the country and working to offer in-car software that better fits local tastes.
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Another major challenge is Porsche’s presence in the US, its biggest single market. The company imports all of the cars it sells there, with US President Donald Trump’s duties costing Porsche roughly €700 million in 2025.
The company’s struggles have forced it to take drastic measures, shelving or delaying EVs and adding more models with combustion-engine and hybrid powertrains. The automaker has also swapped out the majority of its board members.
Porsche is proposing a dividend of €1.00 per ordinary share and €1.01 per preferred share, less than half of what it paid out last year.
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