Porsche is preparing more exemptions. “The business model no longer works”

Porsche has now been in the greatest crisis for decades, which forces the company to take radical savings. President Oliver Blume warned German employees that in the coming months negotiations with trade unions regarding further costs – to put it simply, it is about further exemptions.

The automotive giant plans to reduce employment by over 10% by 2029, preparing on a much smaller sales scale – 250,000. cars per year against 311 thousand last year. In Germany, Porsche employs a crew of 37,000.

The decrease in demand in China and the confusion with the duties in the US seriously hurt Porsche's profitability – reports Fortune.

The company's current business model, as Blume admits, ceases to be effective in the face of market changes. Porsche experiences poor interest in electric and luxury vehicles in China, where competition in the EV segment is huge. In the USA, the largest export market of the brand, problems are intensified by the additional duties introduced by the administration of Donald Trump, which reduce the margins. Blume emphasizes that Porsche feels these negative effects stronger than many competitors in the industry.

The Porsche Management Board continues previous activities aimed at reducing costs. New cuts, agreed with compounds, are aimed at achieving a medium -term operational margin of 15-17%, compared to only 8.6% in the first quarter of this year.

The Moto industry is also burdened with high labor and energy costs in Germany. The manufacturer of the legendary model 911 tries to imitate the home company Volkswagen, which also announced mass reduction of employment – the work will lose up to 35,000. employees. Porsche is in the same direction, wanting to maintain competitiveness and profitability in a difficult economic environment.

Ed. Jm

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