Profits forecasts have been adjustments made by VW Truck & Bus and Porsche SE following a setback in their earnings - Porsche SE, a subsidiary of VW-Dachholding, lowers its profit projection following a drop in earnings
The automotive industry is currently facing a host of challenges, with the U.S. tariffs and a slowdown in China being major contributors. These factors have taken a toll on the profits of several automotive giants, including Volkswagen and Porsche, and their impact is now being felt by Porsche SE.
Porsche SE, the holding company of Volkswagen and Porsche AG, has announced a lowering of its annual profit target. The company's net profit, including valuation changes, decreased by 1.8 billion euros in the first six months of the year. The adjusted earnings for Porsche SE in the same period were 1.1 billion euros, a billion less than the previous year.
The profit drop at Porsche SE is primarily attributed to the challenging situation at Porsche SE's core investments, Volkswagen and Porsche AG. The U.S. tariffs have heavily reduced operating profits for Porsche AG, with their operating profits dropping by around €2 billion in the first half of the year, despite a reduced EU-US tariff agreement (down to 15% from 25%, but still much higher than the previous 2.5%).
The collapse of China’s luxury car market has also impacted Porsche. Sales in China are forecast to be more than 50% lower than their peak, forcing a geographic sales pivot. The global market for electric vehicles is developing more slowly than expected, further weighing on profits, as Porsche and VW face regulatory and competitive pressures.
In response to these automotive sector difficulties, Porsche SE is seeking to diversify by increasing investments in the defense and security sector. The company aims to capitalise on increased European defense spending and geopolitical needs.
The new profit target for Porsche SE is between 1.6 to 3.6 billion euros, down from the previous target of 2.4 to 4.4 billion euros. The company continues to target a net debt corridor of 4.9 to 5.4 billion euros by the end of the year.
[1] Automotive News [2] Reuters [3] Bloomberg [4] Financial Times [5] CNBC
Read also:
- Putin's Struggle to Hang On to His Outer Regions
- Volvo Alters and Reduces the Extent of Its American Vehicle Selection Substantially
- 2025 Ford Mustang Mach-E Equipped with Heat Pump and Offering BlueCruise 1.5
- Tesla introduces a new Model 3 version boasting an impressive 830 km range, available exclusively in China
