Strategic pivot to value over volume

Porsche chief executive Michael Leiters presented a comprehensive turnaround plan named Sportwagenschmiede 35 during the carmaker's Capital Markets Day at the Weissach development centre on Wednesday. The German sports car manufacturer is moving away from high sales volumes to prioritize profitability per unit and premium models. The plan lowers the company's future break-even threshold to fewer than 200,000 vehicles, compared to 279,449 deliveries recorded last year. The shift follows a 10% drop in deliveries during 2025, driven by a 26% drop in sales across China and tariffs in the United States. Operating margins fell to 1.1% last year, prompting parent company Volkswagen to record a 6 billion euro write-down on the brand in September.

At the moment, the main focus is on reducing costs and making the company more financially robust.

Overhead reductions and operational savings

To restore profitability, Porsche agreed to eliminate 9,000 jobs by 2035 under a deal reached with labour unions. The company plans to reduce its managerial positions by 40% and trim its broader workforce by 25% over the medium term, with a long-term workforce reduction goal of 30%. Operating cuts will also target research and development budgets, which peak in 2026 before dropping gradually by up to 20%. Sales and distribution spending will decrease by 20%, while raw material procurement costs will be reduced by 10%. Furthermore, Porsche aims to lower warranty expenses by 45% through improved build quality and will introduce an employee share ownership program by 2028.

Revised product lineup and combustion focus

The updated product strategy scales back electric vehicle targets established under former chief executive Oliver Blume. Porsche plans to introduce two combustion or plug-in hybrid model lines for every pure electric line. The Taycan electric saloon experienced declining interest, with deliveries dropping 60% in 2025 to leave 6,000 units sold in the first half of 2026. The 718 Boxster and Cayman will debut as pure electric models in 2027 before starting production in 2028. However, Porsche will launch a combustion-engine and plug-in hybrid B-segment SUV in 2028 to complement the Macan, with market contributions starting in 2029. Portfolio expansion also includes an SUV larger than the Cayenne in the D and E segments, alongside a mid-engine supercar positioned above the 911 to challenge competitors like Ferrari and Lamborghini.

The 911 will never be electric.

Financial targets and industrial integration

Porsche will reduce vehicle model variants by 20% while targeting a medium-term return on sales between 10% and 15%, aiming toward a 15% operating margin and 45 billion euros in revenue. Cash margins are projected between 9% and 12%, with long-term plans to maintain the upper end of both ranges. To cut engineering expenses, Porsche will expand shared platform development with sister brand Audi. The automaker intends to launch at least one core defining vehicle annually through 2030 while targeting a sixfold increase in its vehicle customization business. If European Union emissions regulations tighten before climate policies shift, company leadership indicated readiness to pay penalties or purchase carbon compensation certificates to protect combustion offerings.