Porsche shifts strategy to combustion engines and luxury cars, drops 20% margin target
CEO Michael Leiters said Porsche will focus on combustion-engine and luxury models, targeting a 10-15% operating margin and abandoning its 20% goal.
Key facts
- Porsche CEO Michael Leiters said the company will focus on combustion-engine and luxury vehicles and is examining three new non-electric models, according to FAZ.
- Porsche targets a medium-term operating return on sales of 10-15% and has abandoned the 20% goal set at its 2022 listing, FAZ reported.
- FAZ reported that about 67% of Porsche sales are expected to have conventional or plug-in hybrid drive after 2030.
- The Macan SUV comes to market in 2028; a seven-seat luxury SUV, called Project K1 internally, is under consideration, mainly for the American market, according to FAZ.
- Porsche plans to raise its average selling price by around 20% and lift top-segment vehicles from 32% to 47% of its range by 2030, according to FAZ.
Porsche CEO Michael Leiters said the sports-car maker will concentrate in the coming years on developing vehicles with combustion engines and is examining the development of three new non-electric models, according to FAZ. Speaking at a capital markets day in Weissach on 6 and 7 October, Leiters said: "For many Porsche customers around the world, combustion engines continue to play a very relevant role." He said what matters is that Porsche can offer customers the right product at the right time.
FAZ reported that Porsche aims to raise its operating return on sales (EBIT margin) from 7.8% to 10-15% in the medium term, with a long-term strategic target of 15%. According to FAZ, the company has abandoned the 20% target known as "Road to Twenty", which Leiters's predecessor Oliver Blume set at Porsche's stock market listing in 2022.
FAZ reported that the share of cars with conventional or plug-in hybrid drive in Porsche's total sales will still be around 67% after 2030, despite the combustion-engine ban decided for 2035. Leiters said this holds regardless of possible changes in regulation, and that "we have in any case four, five more years to earn money with these cars". Last year about 78% of the cars Porsche sold had a combustion engine, according to FAZ.
Porsche has already decided to produce one new model: the Macan SUV comes to market in 2028, FAZ reported. A large seven-seat luxury SUV, which Porsche calls Project K1 internally and which is intended mainly for the American market, could be added, and Porsche is considering further variants of the 911 and has developed a new platform for a supersport car. "We want to use it as the basis for a mid-engine vehicle positioned clearly above the 911," Leiters said.
FAZ reported that Porsche plans to raise the share of vehicles it offers in the top segment from 32% today to 47% by 2030, and to increase its average selling price by around 20% by selling more luxury cars and expanding personalisation and special-request programmes.
Die Welt reported that Porsche is departing from central ideas of recent years, moving towards fewer cars, higher prices and more exclusivity. Die Welt reported that the 911 will remain a combustion-engine car and that the company is returning to what it described as its old DNA.
Context
Porsche listed its shares in 2022, when then-CEO Oliver Blume set a 20% margin target called "Road to Twenty", according to FAZ. A ban on combustion engines has been decided for 2035, which FAZ cites as the backdrop for Porsche's sales-mix planning.
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