Porsche's promised comeback does little to calm investors over China

By Rachel More

BERLIN, June 23 (Reuters) - Porsche's new CEO appealed to shareholders for patience on Tuesday, promising detailed turnaround measures later this year as investors press the sports car maker to reverse a slump in profit margins and revive sales in China.   

CEO Michael Leiters, brought in at the start of the year to oversee a sweeping overhaul of the Volkswagen subsidiary, promised to lay out concrete steps at a capital markets day later on October 7.

Many investors, however, demanded urgent action after a disastrous 2025, during which Porsche's decline in China accelerated and its operating margin collapsed to almost 1%.

"Developments in China, in particular, make it clear that Porsche's business model is no longer viable in its current form," Hendrik Schmidt of shareholder DWS said.

CONCERNS OVER SOFTWARE AND MODEL LINEUP

Shares of Porsche, long synonymous with its 911 rear-engine sports cars, have roughly halved since their 2022 listing. During that time, China has turned from a money spinner for the company into its worst-performing market, with sales falling by 26% in 2025.

Leiters' plan to shore up margins involves a stronger focus on high-end models and sweeping cost cuts, in addition to 3,900 job cuts already agreed with unions.

German automotive industry analyst Ferdinand Dudenhoeffer said early indications of Leiters' strategy showed a typical approach to restructuring. "In the mid- to long-term, it is not clear where the journey is going," he added.

Harald Klein of the DSW association, representing smaller investors, said Leiters failed to mention software and autonomous driving technology - key to winning back tech-focussed customers in China.

"It's not just about brand image, quality or engineering expertise, which Porsche no doubt has. In China, massive investments must be made in the software user experience and new business models," Klein said.

Porsche's popular 911 and the upcoming all-electric Cayenne SUV will play a key role in its future model lineup under Leiters' strategy.

But Dudenhoeffer questioned whether this would be enough. "The Cayenne will certainly face its own test in China when it comes to value for money," he said.

Porsche's business in the world's largest auto market was buoyed for years by strong demand for its premium SUVs. More recently, however, local brands, such as Xiaomi, have emerged offering tech-laden SUVs at lower prices.

(Reporting by Rachel MoreEditing by Tomasz Janowski)