Latest news with #JochenBreckner
Yahoo
30-04-2025
- Automotive
- Yahoo
Porsche cuts 2025 financial outlook due to US tariffs
Porsche has revised its financial outlook for 2025, attributing the change to a challenging first quarter marked by a downturn in China, increased supply chain costs, and the impact of US tariffs on the automotive sector. The German sports car manufacturer has reported a drop in group sale revenue in Q1 2025, ending 31 March, to €8.86bn ($10.01bn) from €9.01bn in the previous year's corresponding quarter. The decline in sales revenue by 1.7% was attributed primarily to the group's lower vehicle sales combined with positive price and individualisation effects. Its operating profit saw a significant decrease to €760m from €1.28bn in the same period a year ago. The group's operating return on sales of 8.6%, a decline from 14.2% in the prior year's same quarter. The company stated that its business results were affected by the current economic and political landscape, as well as internal adjustments. Porsche delivered a total of 71,470 vehicles in the first three months, down from 77,640 in the same period last year. However, the share of electrified vehicles delivered rose to 39%, with all-electric vehicles accounting for 26% and plug-in hybrids for 13%. Porsche Finance and IT executive board member Dr Jochen Breckner said: 'As we expected, the first quarter has been weaker. In addition, the macroeconomic situation will remain challenging. We can't completely escape this, but we are doing everything within our power to counteract it.' US tariffs, which have been in effect since April at 25%, are anticipated to increase car prices significantly, potentially reducing demand and impacting job growth in the automotive sector, reported Reuters. Porsche has decided to halt expansion plans for high-performance battery production at its Cellforce subsidiary. This decision is attributed to a decrease in demand for all-electric luxury cars in China, according to Reuters report. In a press statement, Porsche said: 'The introduction of US import tariffs leads to negative impacts for the months of April and May 2025 which are included in the adjusted forecast. 'However, the adjusted forecast does not take into account further effects of the introduction of US import tariffs. Currently it is not yet possible to make a reliable assessment of the effects for the financial year.' As per the revised financial forecasts for the year 2025, Porsche now anticipates sales revenue to range from €37bn to €38bn, down from the previously projected €39bn to €40bn. The expected return on sales has been adjusted to 6.5% to 8.5%, a decrease from the earlier estimate of 10% to 12%. The forecast for the automotive net cash flow margin has been lowered to 4% to 6%, compared to the initial 7% to 9%. Additionally, the automotive EBITDA margin is now projected to be between 16.5% and 18.5%, which is less than the former forecast of 19% to 21%. However, the anticipated share of battery electric vehicles (BEVs) in the automotive segment remains unchanged at 20% to 22%. Last month, Porsche announced its plans to cut workforce by approximately 3,900 positions to improve profitability. The carmaker intends to reduce its workforce by around 1,900 positions by 2029. "Porsche cuts 2025 financial outlook due to US tariffs" was originally created and published by Just Auto, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Business Insider
29-04-2025
- Automotive
- Business Insider
Luxury European carmakers warn that higher prices are coming if Trump doesn't back off tariffs
Trump's tariffs are battering the car industry, and buyers of luxury European motors are about to feel the pain. European luxury brands Porsche and Volvo issued new tariff warnings on Tuesday as they reported collapsing profits, with Porsche's CFO saying the company would "definitely" hike prices if the Trump administration did not back down. "If negotiations do not turn out to be successful, and the tariff regime stays as we see it today, we will definitely increase prices in the US," said Porsche's CFO, Jochen Breckner, in an earnings call. The German luxury brand, which said it has not yet adjusted prices in the US, is more exposed to the tariffs than many of its rivals, as it imports all the cars that it sells in the country. Porsche cut its return on sales guidance for the second time in two months on Tuesday and said that profits had collapsed 40% in the first quarter. The company has seen sales fall in Europe and China, but said that US deliveries had risen 42% in the first three months of the year. Swedish rival Volvo Cars, which sells the $80,000 EX90 among other models in the US, also signalled that it would look to pass some of the cost of the tariffs onto consumers. "For the US, we are taking commercial measures linked to pricing and what cars we sell," Volvo CFO Fredrik Hansson told analysts in an earnings call on Tuesday, adding that the company continued to monitor the market on "basically a daily basis." Volvo Cars reported a 59% drop in operating profit in the first quarter of 2025 and withheld guidance for this year and 2026, and Hansson warned that "commercial measures" would likely not be enough to steady the ship. The company said it would enact a $1.9 billion cost-cutting plan that would involve an unspecified number of layoffs. Volvo's shares were down over 9% on Tuesday, while Porsche's also slumped 6%. The warnings from European firms come as the Trump administration hinted that tariff relief could be imminent for automakers. A White House spokesperson told multiple outlets that while the 25% tariffs on imported vehicles would remain in place, automakers would be exempted from additional tariffs, such as those on imported steel and aluminum, and would be reimbursed for some of the cost of tariffs on imported car parts. The coming U-turn will come as a relief for carmakers like Ford and GM, which faced having their profits wiped out as a result of the levies, but it is unlikely to prevent carmakers from hiking their prices as they look to absorb the cost of the tariffs. Automakers and analysts have warned that the 25% import tax will lead to major price hikes. Anderson Economic Group previously estimated that new car prices will rise between $4,000 and $12,000, depending on the vehicle.
RTÉ News
29-04-2025
- Automotive
- RTÉ News
Porsche cuts full-year outlook, warns of further uncertainty on US tariffs
Porsche's margins plunged in the first quarter, it said today, forcing the sportscar maker to cut its 2025 outlook in the wake of weakness in China, its main market, rising supply chain costs and US tariffs that are disrupting the global car industry. The US tariffs are expected to raise car prices by thousands of dollars, reducing demand and hurting job growth, rattling an automobile industry already struggling with a slowing transition to electric vehicles. Shares in Porsche were down 6% in early Frankfurt trade today after the carmaker's first-quarter results. In April, Porsche, one of the carmakers most exposed to tariffs as it has no US production, said it had shipped added inventory to the US to get ahead of tariffs and kept prices constant for orders made in March. The group last night said the tariffs, in place since April at 25%, weighed on its business in April and May, and it warned that its adjusted outlook does not factor in the future effects of tariffs. Finance chief Jochen Breckner, in the job since late February, said the macroeconomic environment would remain challenging. "We can't completely escape this, but we are doing everything within our power to counteract it." Porsche said it now expects revenue of between €37-38 billion in 2025, down from its previous forecast of €39-40 billion. Its profit margin is forecast to drop to 6.5-8.5%, down from a previous forecast of 10-12%. According to the average of analyst estimates in an LSEG poll, Porsche's operating margin is seen at 9.7% on revenue of €38.8 billion. Its first-quarter operating margin fell to 8.6%, below the 9.8% analyst average estimate in an LSEG poll. The car maker, which at its stock market debut in 2022 had a higher valuation than its parent company, Volkswagen, has fallen from grace since, struggling in particular with low sales in China, its top market, where first-quarter sales dropped 42%. Bill Russo, CEO of Shanghai-based advisory firm Automobility, said Chinese customers of electric cars had been drawn to domestic brands because of their improved technological offering. "No foreign company believed that the Chinese could somehow build equity that was superior to the foreign brands, especially the Europeans," he said. Porsche also said it would no longer pursue plans to expand high-performance battery production at its Cellforce subsidiary, and it cited a decline in demand in China for all-electric luxury cars.
Business Recorder
29-04-2025
- Automotive
- Business Recorder
Porsche cuts outlook as US tariffs, China weakness hit in first quarter
FRANKFURT: Porsche's margins plunged in the first quarter, the sportscar maker said on Tuesday, forcing it to cut its 2025 outlook due to weakness in main market China, rising supply chain costs and US tariffs that are disrupting the global car industry. The US tariffs are expected to raise car prices by thousands of dollars, reducing demand and hurting job growth, rattling an automobile industry already struggling with a slowing transition to electric vehicles. Porsche finance chief Jochen Breckner said that tariffs resulted in a hit of at least 100 million euros ($114 million) in April and May, but added that the carmaker, which has no local US production, had so far taken no counter-measures. This may change when there is further clarity around final tariff levels, Breckner said, adding 'we will of course have to react accordingly in the market and pass on at least a proportion of the tariffs to end customers'. Breckner said localising production in the United States made no sense at the moment due to Porsche's low vehicle sales figures, even if the group, which is majority-owned by Volkswagen, were to team up with another VW brand. Shares in Porsche were down 5%, as of 0751 GMT. In April, Porsche, one of the carmakers most exposed to tariffs, said it had shipped added inventory to the United States to get ahead of tariffs and kept prices constant for orders made in March. The group late on Monday said the tariffs, in place since April at 25%, weighed on its business in April and May, and it warned that its adjusted outlook does not factor in the future effects of tariffs. China woes Porsche said it now expects revenue of between 37 billion euros and 38 billion euros ($42.17 billion-$43.31 billion) in 2025, down from its previous forecast of 39 billion to 40 billion euros. Its profit margin is forecast to drop to 6.5-8.5%, down from a previous forecast of 10-12%. According to the average of analyst estimates in an LSEG poll, Porsche's operating margin is seen at 9.7% on revenue of 38.8 billion euros. Porsche's 2024 China sales fall by 28% Its first-quarter operating margin fell to 8.6%, below the 9.8% analyst average estimate in an LSEG poll. 'We believe … the firm is taking the opportunity to kitchen sink estimates,' JP Morgan analysts said, adding it still expected Porsche to be able to get back to double-digit margins in 2026. The car maker, which at its stock market debut in 2022 had a higher valuation than its parent company, Volkswagen AG, has fallen from grace since, struggling in particular with low sales in China, its top market, where first-quarter sales dropped 42%. Bill Russo, CEO of Shanghai-based advisory firm Automobility, said Chinese customers of electric cars had been drawn to domestic brands because of their improved technological offering. 'No foreign company believed that the Chinese could somehow build equity that was superior to the foreign brands, especially the Europeans,' he said. Porsche also said it would no longer pursue plans to expand high-performance battery production at its Cellforce subsidiary, and it cited a decline in demand in China for all-electric luxury cars.
Reuters
29-04-2025
- Automotive
- Reuters
Porsche's Q1 profit margin plunges on China weakness, US tariffs
FRANKFURT, April 29 (Reuters) - Luxury sportscar maker Porsche AG (P911_p.DE), opens new tab on Tuesday said its operating margin fell to 8.6% in the first quarter, below analyst estimates, hit by weaker demand in China as well as U.S. import tariffs. "The macroeconomic situation will remain challenging. We can't completely escape this, but we are doing everything within our power to counteract it," finance chief Jochen Breckner said. Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter. Sign up here. First-quarter sales fell 1.7% to 8.86 billion euros ($10.08 billion), while the group's operating profit plunged 40.6% to 0.76 billion, said Porsche, which late on Monday cut its full-year outlook. Analysts in an LSEG poll had, on average, expected an operating margin of 9.8% in the first quarter. ($1 = 0.8790 euros) ($1 = 0.8789 euros)
