Porsche Strategic Realignment

[blueline]

I think many people are reading too much into the "New" ICE 718 choice(s). I suspect they are referring to the low-volume GT4/RS type models, not normal street cars. And if you thought today's prices were high, stand by as extreme low volume ICE models are going to be much more expensive...

Regarding your spot-on observation, a link posted in the most recent e-Brake News:

"The next 718 is still going to have combustion engines, but with a twist."

"While we’re used to EVs being pricier than their ICE equivalents, the next flagship 718 could flip that script, making the gas version the more expensive choice."

https://www.motor1.com/news/773015/pors ... s-engines/

[blueline]

Not unexpected. Hopefully the redirection helps.

From the WSJ:

"Porsche Skids to Loss on Bad EV Bet, Tariffs"
"Sports-car maker has delayed plans for new EVs and reorientated resources back to combustion engines."


https://www.wsj.com/business/earnings/p ... _permalink

[Tom]

Not unexpected. Hopefully the redirection helps.

From the WSJ:

"Porsche Skids to Loss on Bad EV Bet, Tariffs"
"Sports-car maker has delayed plans for new EVs and reorientated resources back to combustion engines."


https://www.wsj.com/business/earnings/p ... _permalink

I guess every company needs to look ahead and try to anticipate the next big thing, but they had a hit on their hands with the 718 and lost a lot of value with their plans to scrap it. The Boy Scouts had it right with their song: Make new friends but keep the old....

[RDMcG]

I think the challenge is that there are several different other issues all at once that go well beyond the critical EV/718 issue.:

(1) Probably have raised prices too far; ( the whole GT3 thing is a very low volume item and all of that shortage stuff is not relevant to the volume business). However overall pricing is an issue.

(2) Lack of US manufacturing facility leaves them vulnerable to US tariffs in a big way, so further price pressure.

(3) If they absorb the tariffs the already fragile margin situation will become much worse

(4) Collapse of the Chinese market is very unlikely to come back as China has brought so much more product to market. Further, the Chinese development allows then to roll out new product in around the third of the time Western manufacturers can achieve. Chine runs a global schedule moving development across global time zones and geographies and in effect has a 24-hour workday.

(5) Poor stock performance and impatient investors need to see results; however Germany is a very difficult country in which to do drastic cost-cutting and layoffs.

As a long-term Porsche enthusiast with a number of cars I think there is serious clause for concern.

[blueline]

I agree with your assessments regarding the big picture. Add in high labor costs (esp as compared to China!) as well as extremely high energy costs and insufficient electrical capabilities, and the signs become increasingly distressing, pointing towards a very, very difficult future for Porsche. The same can be said for most German auto manufacturers with the distress extending into other German and European manufacturing as well. There will likely be casualties.

[RDMcG]

When the market cap of Ferrari exceeds all of VAG there is definitely cause for concern.

[Tom]

On the pricing issue, it's hard to disagree with that. My wife just got a new Subaru Outback for about $40k. It has Nappa leather, and is loaded with tech. It's not as nice as a Macan or Cayenne, but it's darn nice all around -- nicer than most luxury cars just 10 years ago -- nice driving dynamics, plenty of power, and feels surprisingly upscale inside. It's not a Macan or Cayenne by any stretch, but then again you can get 3 or 4 of them for the price of a Porsche SUV... Porsche relies on the SUVs for volume, yet they price them more like a car you're (I'm) afraid to park at the grocery store... so relies on a pretty narrow segment of the market I fear...

$40k...

subaru.webp (45.13 KiB) Viewed 565 times

[blueline]

More from Reuters a few days ago. The interwebs are alive with dire news and speculation regarding Porsche. However, I feel certain they'll get through this, but it is going to be tough slogging for the company, its employees, customers, shareholders, suppliers, etc.

https://www.reuters.com/business/autos- ... 025-10-24/

Prices have already risen monstrously for the 2026 model year vs 2025 (which were already up hugely) as I can personally attest, but it appears they are going to rise substantially more. I don't think the company can continue without a Cayman-like ICE sports car that can reach more potential buyers. With China sales continuing their rapid descent, North America becomes ever more important; Porsche cannot afford to continue in the direction of pricing out potential buyers here as they've done the past several years. Terrible leadership and horrid foresight.

A few quotes from the article:

"Leiters [the new incoming CEO] is set to inherit one of the biggest crises in Europe's beleaguered auto sector."

"Breckner [Porsce's financial chief] said U.S. import tariffs would result in a roughly 700 million euro hit this year, adding Porsche would propose a significantly lower 2025 dividend than the 2.31 euros per preferred share paid for 2024."

"Breckner said Porsche prices will rise further in the U.S. in coming months ..."

[blueline]

A bit of positive Porsche news for a change -

https://www.wsj.com/business/earnings/p ... _permalink

im-89897129.jpg (93.98 KiB) Viewed 509 times

[Stormy_Monday]

Looks like the kitchen appliances are making an impact. And we scoffed

It will be interesting to see what kind of turnaround efforts will happen.