In excellent news for Porsche, the German sports carmaker has reported a sharp recovery in operating profit for the first nine months of the year, offering an early indication that chief executive Michael Leiters’ turnaround strategy is beginning to deliver results as the venture seeks to cut costs and reduce its reliance on the Chinese market.
The German automaker, part of the Volkswagen Group, reported operating profit of 1.74 billion euro, compared with just 40 million euro in the same period a year earlier.
Porsche said the previous year’s result was hit by increased costs, largely linked to its abandoned electrification strategy.
Leiters took office at the start of the year after Porsche’s supervisory board appointed him to change course following setbacks in the sports car giant’s electric vehicle strategy.
The strategy reversal has resulted in restructuring costs worth 2.7 billion euro (USD 3 billion).
Earlier this month, Leiters outlined plans to make Porsche smaller and more profitable by focusing on customisation, exclusive models, and higher-margin vehicles.
The strategy is reflected in sales of the flagship 911 sports car, which rose 12% during the first nine months of the year.
It was the only model in Porsche’s portfolio to record sales growth over the period.
“We are implementing our strategic realignment consistently and at a rapid pace,” Leiters told the analysts and investors, adding that the company was focusing on its core business while making the overall organisational structure a competitive one on the cost front, with the end goal of ensuring sustainable improvements in profitability.
“With the measures already implemented, we are creating the conditions to position Porsche as a stronger, more focused, and more profitable company in the long term,” he said.
Despite the profit recovery, Porsche continues to face pressure from US import tariffs and declining sales in China.
Weak demand in the Chinese market, the world’s largest, has also affected Volkswagen and its subsidiary Audi, contributing to restructuring efforts across the wider group.
Porsche, which has no production facilities outside Europe, is also assessing the implications of potential manufacturing changes within the Volkswagen Group.
Finance chief Jochen Breckner said a possible plant in Georgia planned by Audi would not trigger a shift in Porsche’s production to the United States.
He warned that such a move could add complexity, as engines and other components would still need to be exported to the US, potentially requiring additional supplier investments.