Porsche AG Announces Mid-to-Long-Term Strategy Targeting 25% Workforce Reduction and 10–15% Operating Profit Margin

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Porsche AG announced its mid-to-long-term strategy, "Sportwagenschmiede 35," on the 8th at a Capital Markets Day held at its Weissach Development Center in Germany. The strategy aims to enhance profitability and cash generation by strengthening brand identity, restructuring the portfolio around high-margin segments, and improving cost structure efficiency.

In line with the overall manufacturing climate in Germany, global sales in the first half of 2026 fell 16% year-on-year to 122,306 units. Accordingly, Porsche will maintain its "Value over Volume" principle and expand personalization programs such as Sonderwunsch to increase vehicle exclusivity and value per unit. In the medium term, the company plans to raise the average selling price of top-tier models by approximately 20% and strengthen its performance business by increasing its stake in Manthey Racing to 67%. Through a quality improvement program, Porsche aims to reduce warranty costs by up to 45% in the medium term.

In the product and technology segment, aiming to achieve top-tier sports performance in each segment, Porsche will expand the portfolio share of high-margin D and E segments to approximately 45%. The company plans to reduce the number of derivative models by about 20% to lower complexity and has disclosed plans to develop a mid-engine super sports car platform for the top-tier 911 model line. Pure electric 718 models and new B-segment SUVs are expected to contribute to sales and profitability starting in 2028, while new internal combustion institutional investor and plug-in HYBErid models are slated to do so from 2029.

To improve organizational and operational efficiency, Porsche is executing measures to focus on core businesses, including the sale of Rimac and Bugatti Rimac stakes, and the divestment of MHP. The company has agreed to a "Future Package" that involves reducing managerial positions by 40% and cutting the overall workforce by 25%. This will lower the break-even point to fewer than 200,000 units in sales, reflecting market outlooks for China. Additionally, the company aims to reduce model development costs by up to 20%, production labor costs by up to 30%, sales and distribution costs by 20%, and individual material costs by approximately 10%.

Financially, Porsche has set medium-term targets of a group operating profit margin of 10–15%, an automotive segment net cash flow rate of 9–12%, and group revenue of 41 billion to 45 billion euros. Long-term strategic goals include a group operating profit margin of 15% and a net cash flow rate of 12%, with dividends targeting at least 50% of consolidated net income after tax.

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*This content was translated by AI.View Original