News
Porsche Facing Difficulties In China As Sales Dip And Dealers Are Annoyed
Porsche is facing difficulties in China. Faced with falling sales, anger is growing among dealers. The brand had to travel to China to calm things down and reassure the network.
The first quarter was synonymous with a halt in sales growth for Porsche, whose global sales fell by 4%. This is particularly marked in China, where Porsche is suffering in the face of increased domestic competition. But the fault does not entirely lie with the brand and its distributors: China is in the middle of a real estate crisis, and this is weighing on Chinese households and their purchasing power. An earthquake, which therefore affects the automobile sector and particularly foreign brands, with Germany in the lead.
The decline in sales in China began last year for Porsche (-15%), in a crucial market which until recently represented a quarter of the manufacturer’s global sales. Worse: the first quarter of 2024 resulted in a 24% drop in sales, still in China. The same observation is made in the United States, where sales are at half-mast. Only Germany and Europe are saving the furniture for Porsche at the start of the year.
Anger therefore began to rise among distraught Chinese distributors, to the point that Porsche had to send the commercial director, Detlev von Platen, there to reassure the dealers and find solutions.
The Macan problem
The fact is that software development is expensive for Porsche. The research and development department, still very important for the German brand, swallows up increasingly large sums. 13.4% of Porsche’s budget is now allocated to R&D, compared to 8.1% last year. As a direct consequence, since investments in research increase, profitability decreases, even falling below 15%. A rather unusual value for Porsche.
The release of the Macan could give Porsche some breathing room, but it should have a hard time keeping up with the volumes of the thermal model, which will bow out during the summer. Meanwhile, Taycan sales are falling sharply; customers are waiting for the restaurant to become available. The last element of annoyance for the manufacturer is that if the IPO had gone well with a peak of more than €120 per share in 2023, since then, there has been a lull with a value oscillating around €75. Porsche, however, hopes to experience a sunnier 2025 financial year with the arrival and delivery of new products.
