Finance
Porsche expects margin improvement after rough 2025
Published by Global Banking & Finance Review®
Posted on March 11, 2026
3 min readLast updated: March 11, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on March 11, 2026
3 min readLast updated: March 11, 2026
Porsche forecasts a rebound in operating margin to 5.5%–7.5% in 2026 after a collapse to about 1.1% in 2025 amid tariff pressures, China sales slump and leadership change.
By Rachel More and Ilona Wissenbach
BERLIN, March 11 (Reuters) - Porsche's new CEO announced plans on Wednesday to draw on high-margin sports cars, such as the iconic 911, to recoup losses from a turbulent 2025 marked by tariff costs, electrification missteps and the collapse of its sales in China.
In his debut earnings report since taking the helm in January, new CEO Michael Leiters gave the first hints of his plan to revive the struggling Volkswagen subsidiary, pledging a shift to higher-margin products and intensified cost cuts.
"You can well imagine that over the last 70 days or so, I've worked hard with my team to delve into every detail of our strengths and weaknesses," Leiters told investors, after the company reported a 93% slump in operating profit in 2025.
The initial strategy, to be "pursued with urgency as the next few months unfold", will target a simplified model lineup while assessing options priced above two-door sporty models, such as the 911 and 718 and the Cayenne SUV, where personalised features can boost margins further.
"We have to be leaner, that's for sure. We are not looking at volume," Leiters said.
Porsche today offers a six‑model global lineup covering everything from the entry-point compact Macan SUVs to high-performance sports cars and EVs.
This includes China, once a highly profitable market for Porsche but where sales plunged by more than a quarter in 2025 as local rivals, such as BYD and Xiaomi, built their market share with more affordable, tech-driven luxury SUVs.
Porsche's new CEO said the Chinese market still offered potential in a shrinking market for combustion engines, but stressed that the carmaker would not compete in the EV market, where a brutal price war continues.
Globally, Porsche delivered 10% fewer cars in 2025, with declines across all regions except the U.S., where they stagnated.
Porsche forecast a modest recovery in its group operating return on sales in the range of 5.5% to 7.5% in 2026, after it collapsed to 1.1% in 2025 from 14.1% a year before.
The company cut its proposed dividend for the past year to 1.00 euros ($1.16) per ordinary share and 1.01 euros per preferred share, after earnings were hit by 3.9 billion euros in extraordinary charges.
These included around 2.4 billion euros in charges from a strategic pivot away from electric cars as well as around 700 million euros in tariff costs.
The strategic reversal was announced by Leiters' predecessor Oliver Blume prior to his departure.
Blume, who remains CEO of Volkswagen, already negotiated almost 4,000 job cuts at Porsche, with a second package of planned measures falling on Leiters, who said this initial reduction was "not sufficient".
Leiters, who built his early career at Porsche before stints as Ferrari's chief technology officer and CEO of McLaren, promised further details on his strategy in the autumn.
($1 = 0.8593 euros)
(Reporting by Rachel MoreEditing by Ludwig Burger, Shri Navaratnam and Tomasz Janowski)
Porsche's operating margin fell in 2025 due to profit warnings, tariff costs, and the departure of its long-standing CEO.
Porsche expects its group operating return on sales to be between 5.5% and 7.5% in 2026.
Michael Leiters took over as Porsche's CEO from Oliver Blume on January 1.
Porsche is using current challenges as an opportunity to act more decisively under new leadership.
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