Porsche 2024 First Half - SSO Report

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SSO Report's excellent synopsis of Porsche's financial and production numbers for the first half of 2024 with tables and analysis.

"Porsche’s 1st Half 2024 Results: Low Voltage "

https://ssoreport.com/porsche-1st-half-2024

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[Stormy_Monday]

I liked

"By volume, Porsche is an SUV manufacturer and has been for quite some time."

[WillyDaP]

No real surprise for Porsche as this mirrors the Industry with similar changes being made swiftly by Ford and others. The drop is a wake up call for Porsche , but with the shift back to continuing various ICE models well into the 2030s, Porsche has shown it is not actually asleep at the wheel as many of us feared. More Hybrids, longer life with ICE models and more innovation with EVs, one has to imagine the Company will be ready in the coming years when EV Infrastructure has caught up. I plan on enjoying my 4.0 Liter Cayman for years to come, but after traveling to Illinois with my son for an SCCA National Tour Event , the way his Cayenne Hybrid yanked his ATC trailer down the road, that beast is on a future list. The added torque from the battery meant downshifts just hardly ever happened!

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I don't know Bill - I think Porsche is considerably behind the curve regarding its willingness to slow up its EV transition. EV-only Macan, Cayman/Boxster, Taycan and soon the Panamera. (The Panamera may continue to have an ICE or at least a Hybrid version alongside the EV for awhile longer.) That leaves only the 911 and the Cayenne with any semblance of ICE. (Cayenne with a trio: Hybrids, the soon to be released EV and the recently announced continuation of ICE for an additional five or so years from what Porsche had recently stated was the absolute deadline for ICE Cayennes.)

A bit of panic as Porsche faces reality? I think so.

I understand some of the transition reasoning such as old platforms not easily updated (Macan & 718) that are also not compatible with new EU mandates, but the rest is all on Porsche. Their head of product development just recently slyly doubled down on the EV transition. According to his comments as I read between the lines, Porsche EV transition is proceeding at full-speed. On Aug 27th, Michael Steiner, Porsche’s research and development boss, said in part that "...we will be prepared that 80% of cars we sell in 2030 could be full electric – this is what we prepare for in terms of product portfolio – but the expectation is this transition will happen slower in a lot of markets.” While still a very aggressive EV goal from Porsche, at least he's hedging that EV schedule a bit which is good. (I'll look for a link to that article.)

What's worse is the dearth of 911s. I know there are still some supply chain problems but, outside of Porsche continuing to encourage ridiculous run ups in ADMs to placate its dealers, it makes no sense. We have a Premier Porsche dealership here and there has been only one 992.2 GTS allocation so far. One!

A few highlights from the SSO Report that I picked up on that should be noted:

"...Q1, 911 sales were up 16.5% but 911’s finished the 1st half of 2024 down 5.4% which indicates Q2 was pretty horrific. Porsche is blaming model change overs, but a delta of this magnitude does raise questions on if there are other issues at play here. Porsche has been quite aggressive on pushing 911 price points north in recent years and may have gotten a bit “over its skis” on this. The new 911 Turbo is basically the same list price now as a McLaren Artura and Maserati MC20."

"It is the Taycan that’s got to be more concerning to Porsche, as this is now two quarters in a row of sales being off +50%, and residuals on the Taycan are shockingly poor. This implosion would seem to indicate a much more fundamental problem with Porsche’s EV business in general, which is not too dissimilar to the challenges many of its competitors are facing. In the 1st half of 2023, EVs made up 10.8% of Porsches retail sales. In the 1st half of 2024 2024, that number dropped to 5.9%. Porsche’s decision to offer the Gen 2 Macan only with an electric powertrain currently isn’t aging well."

"Porsche EV sales in Q1 2024 basically collapsed and Q2 didn’t look any brighter."

"In addition, moving the 718 model line to EV only carries significant risk for that part of the business."

"On a final note, this might also be a good time for Porsche to take another look at its planned mix between ICE, hybrid, & EV as the transition to EV is not happening at the speed originally anticipated."

VW is already in trouble, especially in North America. Porsche may be facing some serious sales and possibly even financial issues. The situation will be exacerbated if Porsche loses some of the current exuberance and/or if the punch bowl of "I'll pay any price" 911 buyers suddenly change direction. A good example in my book of irrational behavior? A 2024 S/T with an MSRP of $317k that wasn't even a PTS car sold at Sotheby's yesterday for $602,500. Yes, that's $602,500! Good grief!

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A few quotes from this article that appeared yesterday support other chatter I'm seeing in some automotive-related articles. They are somewhat unsettling.

https://www.cbsnews.com/news/volkswagen ... -china-ev/

"The European automotive industry is in a very demanding and serious situation," Oliver Blume, Volkswagen Group CEO, said in a statement Monday. (Blume is also the CEO of Porsche via the convoluted corporate structure that is the Volkswagen Group aka Volkswagen AG , which is in turn, owned by Porsche SE that Blume heads.)

He cited new competitors entering the European markets, Germany's deteriorating position as a manufacturing location and the need to "act decisively."

A Volkwagen plant closure in Germany would mark the first time the automaker, which was formed in 1937, had closed a domestic factory, according to Bloomberg News. It would also be the first time the company had shuttered any of its manufacturing plants since its U.S. facility in Westmoreland, Pennsylvania, closed in 1988, the dpa news agency reported.

The language is fairly strong. Sending a message to the EU gov overlords? Probably. There's definitely a message to the auto unions in Europe and company stockholders worldwide.

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More unsettling news this morning September 4th from Volkswagen AG which is owned by Porsche SE.

https://www.reuters.com/business/autos- ... 024-09-04/

No idea where this is heading. It may partially be some kind of labor/management posturing, but still some rather dire news coming out of German auto manufacturing and the German auto industry in general,

Some bits in the Reuters piece:

WOLFSBURG, Germany, Sept 4 (Reuters) - Volkswagen (VOWG_p.DE), has "one, maybe two" years to turn its main car brand around, its finance chief said on Wednesday, as the auto giant weighs its first-ever plant closures in Germany and its powerful unions threaten a fight.

To a packed hall of thousands of workers and more outside watching on a screen, Antlitz said Europe's car market had shrunk after the pandemic and the company was facing a shortfall in demand of about 500,000 cars, equivalent to about two plants.

"The market is just not there," he told the meeting at Volkswagen's Wolfsburg headquarters. He added he did not expect sales to recover and that the core VW brand had "one, maybe two" years to cut spending and adjust output.

The line "...did not expect sales to recover..." is sobering. Hopefully, that prediction does not come to pass.

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Another non-Porsche related bit of news from a Euro automaker that dropped today.

"Volvo Cars abandons 2030 EV-only target"

https://www.reuters.com/business/autos- ... 024-09-04/

This from one of the first automakers, if not the first, to announce that they would be all EV in short order. Granted, they have not abandoned those all-EV plans, at least not yet, but they have been delayed from the 2030 drop-dead date. They now are speaking of hybrids and "light" hybrids being sold alongside their proposed EV lineup.

Reality is firing on all cylinders...so to speak.

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[Stormy_Monday]

Not just automotive industry trying to recover from the apocalypse. Intel is also delaying a plant in eastern Germany. A couple articles basically said that German labor isn't competitive anymore. Not surprising with all the social and government overhead required

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Not just automotive industry trying to recover from the apocalypse. Intel is also delaying a plant in eastern Germany. A couple articles basically said that German labor isn't competitive anymore. Not surprising with all the social and government overhead required

Concur 100%.

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@Stormy_Monday

To support your labor cost comment, WSJ also published a piece on the VW plant closing woes today. There was a descriptive chart comparing auto labor costs in the region along with a paragraph describing an example of Germany's labor cost issues.

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"Labor costs in Germany are the highest in Europe, according to an analysis by the German Association of the Automotive Industry. A German auto worker cost roughly €62 an hour last year—equivalent to roughly $68.50—compared with €23 for a Czech worker and €29 for a Spanish one. In Hungary, where BYD is building a factory to avoid European Union tariffs, auto workers are paid only €16 an hour."