Porsche cuts outlook as US tariffs, model revamp eat into profit
The manufacturer's return on sales for 2025 could slide as low as 5 per cent, having previously targeted at least 6.5 per cent, the Volkswagen-controlled brand said Wednesday (Jul 30).
The lower forecast includes the hit from US tariffs the European Union agreed and roughly 1.3 billion euro (S$1.93 billion) of costs related to the brand's strategic reset, including adding more combustion-engine and plug-in hybrid models, Porsche said.
'We continue to face significant challenges around the world,' said chief executive officer Oliver Blume. 'And this is not a storm that will pass.'
Porsche is under pressure due to tepid demand for its electric models and the collapse of sales in China, with US tariffs now adding to the burden. The sports-car maker is trying to get back on its feet by replacing several top managers, slashing costs further – including through job cuts – and revamping its lineup.
The US and the EU agreed on Sunday to lower the tariff rate on cars imported from the bloc to 15 per cent. That's significantly below the earlier 27.5 per cent rate but far higher than the 2.5 per cent levy before Trump's trade offensive.
The US recently overtook China to become Porsche's single biggest market, but the company has no local factory and imports all of the cars it sells there from Europe. One of several options being considered as part of parent Volkswagen's US production expansion is final assembly of Porsche models there, Bloomberg previously reported.
Volkswagen is seeking a further reprieve from the duties based on current and future investments there, with Blume, who runs both companies, saying US negotiators reacted positively to a proposal to reduce the tariff burden by US$1 for every US$1 invested in the country. Volkswagen last week cut its full-year guidance due to the duties.
Porsche's operating profit fell to 250 million euros in the second quarter, its lowest quarterly earnings since at least its initial public offering in 2022. BLOOMBERG
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