Porsche AG Sales Fall Amid Slow EV Market, China Woes -- WSJ

Dow Jones10-25

By Mauro Orru

Porsche AG posted lower sales and operating profit in the first nine months of the year as the company grapples with challenges in the key Chinese market and a slower-than-expected shift to electric vehicles.

The German premium car maker reported sales of 28.56 billion euros ($30.92 billion), down 5.2% on year, as it delivered 226,026 vehicles to customers between January and September, down 6.9% from last year.

Lutz Meschke, deputy chairman of the executive board, said the third quarter had been the weakest of the year for Porsche as the group faces a structural shift in demand in China, the world's largest car market. Meanwhile, the transition to electric vehicles has proceeded more slowly than expected.

"For this reason, we are reviewing our product line-up and ecosystem, as well as our budgets and cost position," he said.

For months, the automotive industry has been dealing with a slow EV market and fierce competition from local car makers in China, forcing several European auto manufacturers to lower their profit and sales forecasts for the year.

Porsche, best known for its sports cars, cut guidance in July because of a supply shortage of lightweight aluminum body components used in its vehicles. The group said at the time that the supply crunch would slow down production.

Operating profit in the first nine months slumped nearly 27% to 4.04 billion euros, generating an operating return on sales of 14.1%. Meanwhile, automotive net cash flow -- a closely watched metric by investors -- fell to 1.24 billion euros from 3.39 billion euros.

Despite industry setbacks, Porsche said the current quarter should be better.

"Every race track has slower and faster sections. The same applies to a financial year," Meschke said. "In the fourth quarter, we expect that we can accelerate and head into the final sprint to the line."

For the year, Porsche said it continued to expect sales between 39 billion and 40 billion euros, an operating return on sales between 14% and 15% and an automotive net cash flow margin between 7% and 8.5%.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

October 25, 2024 11:54 ET (15:54 GMT)

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Porsche AG Sales Fall Amid Slow EV Market, China Woes -- WSJ

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