Well, well, well. It seems the company that charges $15,000 for a paint colour has discovered that money doesn’t, in fact, grow on trees. Porsche just posted a 93 per cent drop in operating profit, and somewhere in Stuttgart a finance director is crying into his extremely expensive espresso. Let that sink in. Ninety-three per cent. That’s not a stumble, that’s falling down the stairs, through the floor, and into the wine cellar.
The Numbers Are Hilarious (If You’re Not a Shareholder)
Revenue dropped to 36.27 billion euros. Operating profit collapsed from 5.64 billion to a measly 413 million. The operating margin went from a smug 14.1 per cent to a deeply humbling 1.1 per cent.
For context, that’s the kind of margin a supermarket would be embarrassed by.
What went wrong? Oh, just the usual: 2.4 billion euros to “realign the product strategy” (translation: we made some cars nobody wanted), 700 million on battery write-downs (oops), and another 700 million thanks to US tariffs (thanks, America). Deliveries fell 10.1 per cent to 279,449 vehicles. Apparently even people with too much money are having second thoughts about spending $400,000 on an SUV.
Enter the New CEO, Stage Left
Dr Michael Leiters took over in January, presumably after drawing the short straw. Seventy days in, he’s already promising to make Porsche “leaner, faster and more desirable.”
One out of three ain’t bad, Michael.
His big idea? Build cars even more expensive than the 911 and Cayenne. Because when profits collapse, the obvious solution is to chase an even smaller pool of even richer customers. Jaguar is trying the same trick, abandoning the mainstream entirely for a Bentley-baiting relaunch. It’s bold, I’ll give them that. Bold like wearing white after Labour Day.
“We are considering the expansion of our product portfolio in order to grow in higher-margin segments,” he announced, with a straight face. Above the 911? Above the Cayenne? What’s next, a Porsche that comes with its own butler?
Above: Lexus GX550 Review
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ABOVE: Is Porsche’s roof on fire, like the rest of the VW group?
China: The Party’s Over
Turns out the Chinese luxury market isn’t the bottomless ATM it used to be. Price wars on EVs, nervous consumers, and intense competition have all conspired to make Porsche’s life difficult. The company is sticking to its “Value over Volume” strategy, which is a very Porsche way of saying “we’d rather sell nothing than discount.” It’s the automotive equivalent of taking your bat and ball and going home.
The Good News (There’s Always Good News in Press Releases)
The 911 Turbo S is now the most powerful production 911 ever. The electric Cayenne is the most powerful production Porsche ever. Lots of “most powerful ever” going around, which is nice, even if nobody’s buying them. And hey, net liquidity is still strong. The balance sheet is healthy. Porsche can afford to have a few bad years before anyone needs to sell the family silver. Although at this rate, the family silver might be a Cayenne with 200,000 kilometres on it.
2026: Lower Your Expectations
Porsche expects operating margins of 5.5 to 7.5 per cent next year. Better than 2025’s disaster, but still a far cry from the double-digit glory days. There will be more “one-off effects” — that’s code for more write-downs and restructuring costs. CFO Dr Jochen Breckner put it with admirable German directness: “In order to secure adequate margins by Porsche standards in the medium term and strengthen our resilience in the long term, we accept these burdens.” Translation: It’s going to hurt before it gets better. Pass the schnapps.
The Bottom Line
Porsche spent decades printing money while charging eye-watering premiums for cars that were, admittedly, rather good. Now the EV transition, Chinese competition, and global economic jitters have arrived at the same time, and suddenly the premium business model looks a lot more fragile. Their solution? Go even more upmarket. Chase the 0.001 per cent instead of the 1 per cent. Build something above the 911.
It’s either genius or delusion. Given that this is Porsche, it might just work. After all, there’s always a richer fool somewhere.
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Alan Zurvas is the founder and editor of Gay Car Boys, Australia's leading LGBTQI+ automotive publication. Before launching GCB in 2008, Alan's automotive writing was published in SameSame.com.au and the Star Observer. With over 16 years of hands-on car reviewing experience, Alan brings an honest, irreverent voice to every review — championing value and innovation over brand loyalty.
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