Porsche to prioritise top-end fashions because it braces for a contraction in gross sales and 9,000 job cuts

Porsche is steeling itself for a contraction in sales over the next decade as it follows parent group Volkswagen by announcing thousands of job cuts.

On Wednesday, the company presented to investors its Sportwagenschmiede ’35 strategy it hopes will boost margins with a focus on top-end models.

The renowned sports car maker, like VW, is undergoing restructuring to address weak demand and high costs, said it would lower its future break-even point to fewer than 200,000 units, compared with total deliveries last year of 279,449 cars.

Porsche has already seen deliveries slump by almost 10 per cent globally since the year of its blockbuster listing in 2022, as plunging demand in China and tariff woes in the US hit two of the brand’s most important markets.

Part of its cost-cutting measures is a ‘socially responsible reduction of 9,000 jobs’ to streamline to a core workforce until 2035. 

The German brand completed its sale of its entire stake in Bugatti Rimac and Rimac Group to an international investor consortium last month and will shutter a number of other subsidiary businesses.

CEO Michael Leiters (pictured) said Porsche will focus on high-end sports cars like the 911 and luxury SUVs to put the carmaker back on track

CEO Michael Leiters will seek to assure investors that a focus on high-end sports cars like the 911 and luxury SUVs will put the carmaker back on track.

Its profit margin collapsed last year to 1.1 per cent, a fraction of the double-digit, Ferrari-style margins targeted when the Stuttgart-based carmaker went public four years ago under Oliver Blume, Leiters’ predecessor.

Blume remains CEO of Volkswagen, where he is battling with unions to push through a drastic overhaul of the German auto group, including some 100,000 layoffs worldwide and the closure of up to four German plants before 2030.

Leiters is pursuing a ‘value over volume’ strategy and pivoting back to combustion-engine models after costly missteps on EVs under Blume.

He also hopes to cut development costs by increasing platform-sharing with fellow Volkswagen brand Audi, the company said on Wednesday.

Porsche will lower its future break-even point to fewer than 200,000 units a year, compared with total deliveries last year of 279,449 cars

Porsche has already seen deliveries slump by almost 10 per cent globally since the year of its blockbuster listing in 2022, as plunging demand in China and tariff woes in the US

But despite the cuts, Leiters said Porsche is committed to adding all-electric 718 Boxster and Cayman models to its line-up, both of which have been delayed as the company reconsiders its acceleration towards electrification.

Both are due to be unveiled next year, having initially been earmarked for a debut in 2025.

In 2028, a new medium-size SUV will be presented, which will be offered in parallel with the current all-electric Macan. 

The new vehicle, featuring internal combustion and plug-in hybrid powertrains, is ‘expected to make a noticeable contribution to sales and profitability in 2029,’ it said.

And it will also launch new products in the particularly high-margin executive vehicle segments currently occupied by the combustion Panamera and the electric Taycan.

These new models are ‘expected to further improve earnings,’ the company said. 

Whereas the Taycan could be shelved as early as 2030, according to reports in Germany.

Insider sources have told business magazine WirtschaftsWoche that the carmaker will discontinue the EV – which starts from £88,400 in the UK – by the end of the decade after deciding against relocating its production.

According to the publication, Porsche originally considered relocating production from its Stuttgart plant to its Leipzig facility, which has more capacity.

‘The ultimate goal is to further strengthen our unique sports car brand – across all model lines and with new, highly desirable models in particularly high-margin segments,’ Leiters added on Wednesday.

‘At the moment, the main focus is on reducing costs and making the company more financially robust.’