Porsche, the renowned German luxury car manufacturer, has reported a significant decrease in profits amid ongoing restructuring efforts and shifting market conditions. The company's net profit after taxes dropped by 95.9 percent to 114 million euros for the first nine months of the year. This steep decline is attributed primarily to substantial one-off costs linked to a strategic shift focusing on the continuation of combustion engine models and a delay in electric vehicle production plans.

Financial data released by the company revealed that operating profit (EBIT) for the third quarter turned negative, amounting to a loss of 966 million euros, compared to a gain of 974 million euros in the same period the previous year. Revenue also fell by six percent, totaling approximately 26.9 billion euros for the first three quarters.

Strategic Changes and Market Challenges

Porsche's management has recently reevaluated its ambitious electric vehicle targets, postponing the launch of new electric models and scaling back plans for in-house battery production. Instead, the company is extending the lifecycle of its combustion engine vehicles to adapt to evolving market realities and consumer preferences. These measures are expected to result in extraordinary costs of around 3.1 billion euros for the 2025 fiscal year.

The company's leadership indicated that the temporary decline in financial performance reflects the costs of this strategic realignment. Porsche executives remain optimistic about the company's long-term prospects, anticipating improved results from 2026 onwards as the restructuring efforts take effect.

Sales Performance and Regional Trends

Despite its historical success, Porsche has encountered persistent challenges in key markets. The company is facing its second consecutive year of declining sales volumes. From January to September, Porsche delivered approximately 215,500 vehicles worldwide, down by six percent compared to the same period last year.

The most pronounced downturn occurred in China, where Porsche sold only 32,200 vehicles in the first nine months--a 26 percent drop from the previous year. This decline is attributed to a broader contraction in the luxury car market across the region. For comparison, Porsche sold over 68,700 vehicles in China during the same period two years ago, representing a substantial shift in demand.

Management Transition and Outlook

Amid these economic headwinds, Porsche is also undergoing leadership changes. The company's current chief executive, who also leads Volkswagen, will transition fully to Volkswagen by the end of the year. Michael Leiters, former McLaren executive, is set to take over as Porsche's CEO in early 2026, aiming to guide the company through its next phase of transformation.

Cost-Cutting Measures Impact Workforce

In response to declining financial results and ongoing industry challenges, Porsche is implementing a comprehensive cost-reduction program. Plans are underway to eliminate approximately 1,900 positions in the Stuttgart region by 2029, primarily through socially responsible measures. Additionally, contracts for about 2,000 temporary employees are not expected to be renewed.

Further savings initiatives are currently under discussion with employee representatives. These negotiations may include additional job reductions and a review of employment security policies. The company has stated that it will inform employees and the public of the outcomes once agreements have been finalized.

Porsche's actions reflect wider difficulties facing the German automotive sector, including shifting consumer demand, global trade tensions, and increased competition in electric mobility. The company's leadership remains focused on strengthening financial resilience and ensuring long-term profitability through these challenging times.