Porsche to cut management and bet on pricier cars

Porsche plans to cut about 40% of management positions and shift its model range toward more expensive, higher-margin vehicles. These measures are part of the German manufacturer Sportwagenschmiede's new strategy '35, presented on October 7.

The company wants to make its management structure simpler, speed up decision-making, and reduce costs. In addition to cutting managerial roles, Porsche plans to cut the total number of employees in direct and indirect functions by about 25% in the medium term, with a strategic target of 30%. Personnel costs under the program are to fall by about 10%.

A second key element of the strategy will be the shift from growing volumes to increasing earnings on every car sold. Porsche maintains the principle of Value over Volume - "value matters more than volume" - and plans to significantly expand its presence in more expensive segments.

The company expects to raise the average price of its most expensive models by about 20%. According to the Financial Times, by 2030 this figure could exceed €330,000. The share of expensive models in the upper segments of Porsche's portfolio is expected to grow to about 45%.

At the same time, the automaker will simplify its model range. Porsche wants to cut the number of vehicle variants by about 20%, which should reduce production complexity and increase sales per individual version.

The new course does not mean abandoning internal combustion engines. Porsche plans to continue investing in both gasoline and hybrid powertrains and in the next generation of battery technologies. The company has already had to revise much more aggressive electrification plans due to weaker-than-expected demand for electric vehicles.

Among new products, Porsche is considering creating a mid-engine platform for a supercar that would sit above the 911 in the model hierarchy. The company is also exploring the possibility of a new large SUV above the Cayenne and intends to increase the number of particularly expensive 911 versions.

Another source of additional margin is to be personalization. Porsche wants to grow its Sonderwunsch business of individual cars several times over, where customers can order exclusive trims and practically unique versions of vehicles.

The restructuring follows a sharp deterioration in Porsche's financial results. At the end of 2025, the company's revenue fell to €36.27 billion from €40.08 billion a year earlier, and operating profit collapsed to €413 million. The operating return on sales was only 1.1% compared with 14.1% in 2024.

Results were pressured by costs for revising the product strategy, battery business problems, US tariffs, and falling sales in China. Extraordinary expenses alone in 2025 were estimated by Porsche at about €3.9 billion.

The new strategy is supposed to return the company to double-digit profitability. In the medium term, Porsche is targeting an operating margin of 10-15%, and retains 15% as a long-term goal. At the same time, the company wants to lower its break-even point to less than 200,000 cars a year in order to depend less on sales volumes.

Based on materials from: Porsche, Financial Times, Süddeutsche Zeitung