Porsche Reduces Expectations

Volkswagen’s struggling luxury brand Porsche has cut its full-year profitability target following the EU’s trade deal with US President Donald Trump and after reporting a 400 million euro ($462 million) loss due to tariffs in the first half of the year.

The burden of tariffs on car imports into the United States has only added to Porsche’s problems as it undergoes a costly restructuring and grapples with weakness in its key market of China and a slow transition to electric cars.

“We continue to face significant challenges around the world. And this is not a storm that will pass,” said Porsche CEO Oliver Blume.

Taking into account the newly agreed 15% tariff effective from August 1, the German automaker expects group sales this year to be in the range of 37 to 38 billion euros, in line with the previous forecast, and a sales recovery of between 5 and 7%, down from the previously expected 6.5-8.5%.

Countermeasures such as price adjustments are included in those forecasts as Porsche seeks to mitigate the damage, the company said. Recently released group data showed that Porsche’s operating profit fell by 91% year-over-year in the second quarter, to € 154 million.

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