Porsche reports huge drop in global sales

(MENAFN) Luxury automaker Porsche has announced a significant drop in global sales for the first half of the year, pointing to fierce competition in China as a key factor, according to a company update released on Tuesday.

The carmaker reported a 6% year-on-year decrease in worldwide deliveries, with a particularly steep 28% plunge in the Chinese market. Once a cornerstone of Porsche’s global success—contributing about 30% of its total sales in 2022—China has become a challenging environment for the brand. Sales began to slip in 2023, prompting the closure of several dealerships in the country.

The company cited “the challenging market conditions” and “intense competition” in China as major contributors to the downturn.

Local Chinese brands such as Xiaomi are rapidly gaining ground, offering high-performance electric vehicles at lower prices. These companies are also redefining industry standards with much faster development cycles. While international manufacturers typically take more than five years to bring a new model to market, Chinese firms like BYD and Chery are doing so in just 18 months, as previously reported.

In response, the United States and the European Union have imposed tariffs on Chinese EV imports, accusing Beijing of providing unfair subsidies. However, analysts suggest it is China’s fast-paced innovation and production efficiency—more than subsidies alone—that is giving its automakers an edge over foreign competitors.

The German market, Porsche’s home base, experienced a 23% decline in sales. Across Europe as a whole, the company saw an 8% drop. These figures reflect broader economic troubles in Germany, where GDP contracted by 0.2% in 2024, following a 0.3% decline in 2023. Rising energy costs, high interest rates, slow digital modernization, and a shortage of skilled workers have all placed strain on the country's industrial output, including the automotive sector.

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