Porsche cuts production capacity, prioritizes profitability

Porsche is embarking on a significant strategic shift, planning to reduce its global production capacity to align with falling demand while aiming to increase profitability by focusing on higher-margin vehicles. The announcement, detailed by CEO Michael Leiters in a speech and media interviews, comes as the automaker confronts a sharp sales decline from its 2023 peak.

The company delivered a record 320,221 cars worldwide in 2023, but sales fell to 279,449 units in 2025, a level comparable to 2020. The downturn has continued into 2026, with first-quarter demand down 15 percent to 60,991 cars. A severe slump in China, attributed to weak consumer demand and rising local competition, has been a primary driver of the decline. In Europe, the temporary discontinuation of the 718 and Macan models due to regulatory issues has also impacted volume.

Financially, the company's operating profit plummeted from 5.64 billion euros in 2024 to 413 million euros in 2025, with its operating margin collapsing from 14.1 percent to 1.1 percent. The company also booked 3.9 billion euros in expenses related to revising its product strategy to include more combustion engine vehicles.