Porsche predicts profit dip in 2024 after three record years

Porsche sold a record number of cars for the third consecutive year in 2023, significantly boosting its revenues and profits – but predicts a dip in 2024 as a result of heavy investment in new model lines. The German firm generated €40.5 billion (£34.6bn) in revenue last year – a 7.7% increase on 2022. Of that, €7.3bn was profit – a near-identical year-on-year uptick. That increase comes despite what Porsche refers to as “disruptions to global supply chains, significant inflation and exceptionally high investments in digitisation, product and innovation portfolios and the brand experience”. Porsche delivered a record 320,221 cars in 2023, reflecting a “more balanced” spread of sales globally, after a dip in demand from China – its largest market – dented its delivery tally in 2022. Sales continued to slide in China in 2023, down 15% on 2022 to 79,823 sales, to make North America the brand's biggest market, with 86,059 sales. The arrival of the new Macan EV in the coming months is widely seen as crucial to shoring up the brand's position in China, which has a strong affinity for electric premium SUVs. The new Macan's launch – delayed by around a year due to problems at the Volkswagen Group's software division, Cariad – is especially important in Europe too, as new regional software regulations mean the strong-selling ICE Macan will be taken off sale in the coming months. It will, however, remain available in the UK. Porsche CEO Oliver Blume gave a cautious outlook concerning Porsche's financial performance in 2024 in light of a substantial new model investment programme and various market "headwinds", predicting €40-42bn of revenue and margins of between 15% and 17% - down on 18% in 2023 and falling short of analysts' expectations. "We expect strong headwinds given the global economic conditions," he said, but added: "We are convinced that our exclusive range of new vehicles will continue to bring our margins up further. We are pushing ahead with our road to 2030 programme." He explained that Porsche is at the bottom of a fiscal "V-curve", meaning it has made significant investment in new products but has yet to bring them all to volume production. "We have not achieved volume production yet, and if you do this across five volume lines, it is obvious what happens," he said. Asked by Autocar if Porsche would have a more positive 2024 outlook if the Macan had been launched as scheduled, chief financial officer Lutz Meschke said: "Even if it had been launched earlier, looking at the earnings side, I don't think it would have given us a benefit or advantage." Blume concurred and suggested that the firm has learned valuable lessons from the Macan development programme that will help it avoid similar delays on upcoming cars. "It is not a secret that when founding Cariad, we had several issues during the ramp-up. I believe the decision was the right one – to centralise everything." "Last year, we started a complete restructuring and introduced a new leadership team to strengthen the platform," he added, referring chiefly to the appointment of ex-Mercedes technology boss Sajjad Khan as the boss of Porsche's new technology division, Car-IT. Blume said that Khan "will be in a position to support and promote the Porsche requirements" when it comes to developing new Volkswagen Group architectures and software platforms. "Over the next few years, we believe there will be stabilisation," he said. "We are not hiding from headwinds. It will be a demanding year, but we will act on this solid foundation." Porsche reaffirmed its ambition for 80% of its sales to be electric in 2030 but said that goal is contingent on customer demand and the “development of electromobility” in different global markets. Blume said that adhering to that self-imposed timeline is "very much dependent on development in world regions". He referred to a general "flattening out" in EV demand across Europe as one factor in the prevailing uncertainty and said "it is very important to have plannable conditions" when deciding its investment strategy. SUVs remain the firm's strongest sellers, with the Macan and Cayenne accounting for more than 87,000 sales apiece in 2023, compared with 50,146 911s (up 24% year on year), 40,869 Taycans and 20,518 718s (Boxsters and Caymans). Porsche says its strong 2023 performance stands it in good stead for 2024, which will be one of its busiest years yet for new product launches, with new versions of the Macan, Panamera, Taycan and 911 – which will gain a hybrid option for the first time – all due on sale by 2025. The long-awaited electric successor to the 718 is due to go on sale in 2025 and an electric Cayenne SUV will follow close behind. In around 2027, Porsche will add a new model line to its portfolio for the first time since 2019, in the form of a new luxury SUV “intended to tap into new customer potential, particularly in the US and China”. Codenamed K1, it will be the first car to use Porsche’s new SSP Sport EV platform and its first seven-seater. Meschke explained that while these substantial investments "may put pressure on returns in the short term", the brand's medium-term and long-term forecasts remain positive. "We are investing, even in challenging times, in our innovative and high-quality products," he said. "Studies have shown that the number of people who can afford our products is expected to rise worldwide, so Porsche has excellent prospects."