by New Porsche strategy: focus on profit, not sales volumes
Porsche has announced the launch of the “2035” strategy, which radically changes its approach to business. The main focus is now on profitability, not on the number of cars sold. New CEO Michael Leiters has promised to reduce the number of modifications, optimize operational processes, and restore the sporty spirit of the brand.
At the annual general meeting of shareholders, Leiters presented the foundations of a transformation plan aimed at restoring the profit margin, which fell to a critical 1.1% last year. The company’s management acknowledges that it needs patience from investors, as changes take time.
Return to roots: sports cars and exclusivity
The first pillar of the new strategy is based on a return to the fundamental values of the brand. Porsche is betting on sports cars, thrilling driving, performance, and exclusivity. Leiters emphasizes that the company will not chase sales volumes for the sake of numbers alone.
We must rethink “Made in Germany” and prove our capability. Ultimately, this will determine our success, — Leiters stated.
Simplification of the model range and the future of the 911
The second pillar of the strategy concerns products. Management acknowledges that the model range has become too complex, so the company will reduce the number of variants. In the US, sales of the Taycan Cross Turismo have already been discontinued. Porsche confirms its commitment to internal combustion engines, hybrid, and electric powertrains.
Special attention is given to the iconic 911 model. Leiters assures that there will be no fully electric version. Instead, the future of the sports car is tied to a hybrid system, which first appeared on the GTS version and is now available on the Turbo as well. The company also has high hopes for the electric Cayenne, which is expected to help shape the brand’s true electric vehicle legacy.
Tough cost-cutting measures and optimization
The third pillar of the strategy involves internal transformation. Porsche plans to more actively use shared platforms with the Volkswagen Group, increase efficiency, and reduce bureaucracy. Staff reductions and other cost-cutting measures are being discussed. Leiters made it clear that previously announced measures will not be enough.
We are focusing on discipline, clear priorities, and the systematic implementation of necessary measures. They will be very noticeable and, in some cases, uncomfortable. However, they are necessary to get us back on the path to success, — said Chairman of the Supervisory Board Dr. Wolfgang Porsche.
These changes indicate a serious revision of the development strategy. The company, which for decades was associated with stable growth and high margins, is now forced to acknowledge the mistakes of past years. Excessive expansion of the model range and the pursuit of sales volumes led to brand dilution and a decline in profitability. The new strategy focuses on returning to the roots, where every car should be desirable, not just accessible. The rejection of a fully electric 911 and the emphasis on hybrid technologies show that the company is cautious about electrifying its iconic model, trying to preserve its character. At the same time, the success of the electric Cayenne will be a key test of Porsche’s ability to compete in the premium electric vehicle segment. Whether the company has enough patience and resources to implement such an ambitious plan remains to be seen, but the first steps indicate a willingness to make radical changes.
