Porsche says its business model "no longer works”

The boss of Porsche has told employees the automaker’s traditional business model – which previously saw it boast industry-leading profit margins – needs to be scrapped. 

According to Bloomberg, a memo from Porsche CEO Oliver Blume told employees, “Our business model, which has served us well for many decades, no longer works in its current form”.

Mr Blume was setting the ground for cost-reduction plans for the German sports car manufacturer, following previous job cuts aimed at reducing costs amid falling sales and revenue. 

Porsche posted a six per cent global sales decline in the first half (H1) of 2025, selling 146,391 new vehicles compared to 155,945 over the same period last year. 

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As a result, the company revised down its profit margins – previously the envy of the automotive industry – to 6.5-8 per cent, around half its 14.1 per cent operating profit in 2024.

The overall sales drop came despite record H1 sales in its biggest market, the United States (US), where sales grew 11.2 per cent.

China – a previously reliable market for growth – saw the biggest downturn, with a 28 per cent fall in sales in H1 coming after a similar slide there in 2024.

“The primary reasons for the decline remain the challenging market conditions, particularly in the luxury segment, and intense competition in the Chinese market,” its H1 sales report said. 

While other German brands struggled in China in 2024, too, Porsche’s pain spread to its home market of Germany in 2025, with a 23 per cent drop in H1 sales. 

Sales in Australia were down 12.8 per cent over the same period, with every model posting a year-on-year decline apart from its best-selling Macan SUV’s 0.3 per cent increase, and Panamera’s near doubling of sales. 

Globally, Macan sales have improved by 15 per cent, according to Porsche, with the Panamera sales up 13 per cent. 

The German automaker has gone heavy on both hybrid and electric vehicles, introducing the second-generation Macan in 2024 as an EV only, with petrol and hybrid versions to arrive in showrooms as soon as 2027.

Porsche says that 60 per cent of Macan buyers globally are opting for the electric version as stocks of petrol versions run out. 

In the first half of 2025, Porsche has delivered 706 EVs and 181 PHEVs in Australia, accounting for 30 per cent of its total 2965 year-to-date deliveries.

Looking at global figures, electrified vehicles – inclusive of EVs and PHEVs – accounted for 36.1 per cent of the brand’s sales in H1, led by Macan Electric, the brand’s second battery-electric model after the Taycan. 

In mid-2024, Porsche dropped its previous goal for EVs to make up 80 per cent of its total sales by 2030, with its EV push costing it a reported US$831 (A$1.26 billion) according to Automotive News. 

Models previously set to go electric only – including the Cayenne SUV – are now set to continue with internal combustion.

The iconic 911 sports car range remains petrol powered but saw the first hybrid version arrive in Australian showrooms in early 2025.

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