BERLIN, March 11 (Reuters) - German carmaker Porsche, a subsidiary of Volkswagen, expects its operating margin to rise this year, as it dusts itself off from a turbulent 2025 rocked by profit warnings
Calling 911: Porsche CEO looks to petrol classics for margin revival
Porsche's Strategic Shift Amid Financial Turbulence
By Rachel More and Ilona Wissenbach
CEO Michael Leiters' Debut and Vision
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.
Leadership Approach and Immediate Actions
"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's Global Lineup and Market Performance
Porsche today offers a six‑model global lineup covering everything from the entry-point compact Macan SUVs to high-performance sports cars and EVs.
Challenges in the Chinese Market
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.
Global Sales Decline
Globally, Porsche delivered 10% fewer cars in 2025, with declines across all regions except the U.S., where they stagnated.
Financial Results and Outlook
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.
Dividend Cuts and Extraordinary Charges
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.
Breakdown of 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.
Cost-Cutting Measures and Leadership Transition
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.
Additional Information
($1 = 0.8593 euros)
(Reporting by Rachel MoreEditing by Ludwig Burger, Shri Navaratnam and Tomasz Janowski)
