Following a slump in profits in the second quarter, the troubled sports car manufacturer Porsche has once again lowered its full year outlook. When presenting the half-year figures, CEO Oliver Blume and CFO Jochen Breckner warned of a decline in the operating margin to a range of 5% to 7%. At the end of April, the group's management reduced its return on sales forecast to between 6.5% and 8.5%, down from its original forecast of between 10% and 12% made in the 2024 annual report. By way of comparison, the Stuttgart-based Dax member achieved 14.1% in 2024. And this had already represented a loss of 3.9 percentage points.

Based on management's expectation of unchanged sales in a range of 37 to 38 billion euros, Porsche is targeting an operating profit of only 1.9 billion to 2.7 billion euros in the current year. In 2024, the luxury brand, which is majority-owned by Volkswagen, still made 5.6 billion euros.

The renewed downward revision of the earnings forecast is based on the 15% US import tariffs recently agreed between the EU and President Donald Trump's administration. Until now, Porsche had only taken into account the impact of tariffs for April and May. The new outlook already includes planned price increases. In a conference call with journalists, the CFO announced that prices in the US market would be raised by between 2.3% and 3.6%. Porsche does not have its own factories in the US. The Swabian company exports its vehicles to the Nafta region. With increased gross prices, Porsche aims to cushion the additional costs. Breckner estimated the additional costs due to tariffs in 2025 at a „high three-digit million amount.“

When asked, the CFO did not want to specify a timeframe for when Porsche aims to achieve its long-term return target of 20%. The achievability of this level will be „reviewed“ as part of the company's „realignment,“ according to Breckner. There would have to be „painful cuts“. According to Blume, negotiations with the works council on additional extensive cost-cutting measures will begin in the current second half of the year. The CEO did not want to give any details yet. There are fears that Porsche will cut even more jobs.

In a first round at the beginning of the year, Porsche decided to cut around 1,900 jobs by 2029. In addition, the company did not renew around 2,000 temporary contracts. At the time, Blume announced that further savings would be made. There are two main reasons for this: Porsche sales in China have plunged. And the CEO acknowledged that Beijing's increased luxury tax is an additional burden.

Also, the transition to electric mobility is progressing more slowly than expected. Porsche made a U-turn in 2024. Instead of focusing solely on new electric models, the Stuttgart-based company is stepping up production of models with combustion engines. „We should perhaps have been even more flexible,“ said Blume self-critically, looking back.

The group's management wants to use a shrinkage strategy to reduce costs in the face of declining sales. This should help to gradually increase profitability again. However, the „strategic realignment“ will initially cost a lot of money. Porsche expects additional expenses of 1.3 billion euros for this in 2025.

Of this, 200 million euros was attributable to the first half of the year. „The world is changing dramatically – and, above all, differently than expected a few years ago. Individual strategic decisions made back then appear in a different light today,“ the CEO admitted.

In the first half of the year, Porsche's operating profit slumped by two thirds to 1 billion euros. The margin shrank from 15.7% to 5.5%. The parent company VW announced its key figures at the end of last week. In the second quarter alone, earnings fell to 154 million euros, down from 1.7 billion euros a year earlier. The return on sales plummeted to 1.9% from 17.8%. Porsche thus performed worse than the high-volume car brand VW.