Stock Markets
Porsche cuts China dealership network as challenges mount

By Ilona Wissenbach and Christoph Steitz
FRANKFURT (Reuters) -Porsche will pare back its dealership network in China, reflecting persisting weak demand in the world’s biggest auto market that has severely hit European carmakers and forced them to cut costs to soften the blow to profit margins.
Porsche is seeking billions of euros in cost cuts by 2030, Chief Financial Officer Lutz Meschke told journalists after presenting a 41% drop in third-quarter operating profit.
“China is an incredible challenge, not just for Porsche,” Meschke said. “In the future, we can no longer assume that China will return to where it was for European players.”
Meschke said Porsche’s cost structure will be adjusted to reflect global annual vehicle sales of around 250,000, down from the more than 300,000 it sold in recent years.
Porsche, majority-owned by Volkswagen (ETR:), said weaker demand in China and a slower-than-anticipated shift to electric vehicles forced it to review its product lineup, budgets and costs.
“All with the aim of increasing our flexibility and resilience even further,” Meschke said, adding that Porsche faced a structural shift in demand in China, where an economic crisis has hit spending on luxury goods.
“We’re not giving up on the Chinese market but we need to face the facts,” he said, adding vehicle sales in China were expected to stagnate in 2025 compared to this year and that Porsche would significantly cut its local dealership network.
Third-quarter operating profit fell 41% to 974 million euros ($1.05 billion), below the 1.08 billion average estimate by analysts, according to LSEG, while sales for the period fell to 9.1 billion euros, resulting in an operating margin of 10.7%. That margin was far below its 17%-19% medium-term margin outlook.
Porsche’s comments chime with those of peers BMW (ETR:) and Mercedes-Benz (OTC:), which heavily depend on China and are under pressure to slash costs and seek sales growth elsewhere.
Mercedes-Benz on Friday said it will step up cost cuts after earnings halved in the third quarter due to tepid demand and fierce competition in China, posting the worst return on sales in its key car unit since the pandemic.
Porsche confirmed its 2024 outlook, still expecting sales of 39 billion to 40 billion euros and an operating margin of 14%-15%. Analysts’ average estimates are for 2024 sales of 39 billion euros and a profit margin of 13.8%, according to LSEG.
($1 = 0.9256 euros)
Stock Markets
Mexico’s central bank will likely bring interest rate down to 9.5%: Reuters poll
Stock Markets
Robinhood suspends trading in Super Bowl betting contracts after CFTC directive
Stock Markets
Fed can be patient on rates while assessing impact of tariffs, Collins says
- Forex3 years ago
Forex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Forex2 years ago
Unbiased review of Pocket Option broker
- Forex3 years ago
How is the Australian dollar doing today?
- Forex2 years ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
- Cryptocurrency3 years ago
What happened in the crypto market – current events today
- World2 years ago
Why are modern video games an art form?
- Commodities3 years ago
Copper continues to fall in price on expectations of lower demand in China
- Forex2 years ago
The dollar is down again against major world currencies