Analysis-Porsche aims to regain speed with cost cuts and combustion engines

By Rachel More

BERLIN, March 10 (Reuters) – Porsche’s new CEO is likely to double down on cost cuts and lean harder into combustion-engine cars as he seeks to persuade investors he can revive the ailing sportscar maker in his first earnings update on Wednesday.

But global trade tensions and the potential economic shock from war in the Middle East will make any turnaround difficult.

There’s no time to lose.

Porsche’s shares have more than halved since their 2022 listing, its margins have collapsed, it has lost huge ground in China – the world’s biggest auto market, and last year it took a $3.1 billion hit on a mistimed shift to electric cars.

Investors are impatient.

“We would like clarity on his strategy as soon as possible,” said Ingo Speich at top-20 shareholder Deka Investment. “We expect a strong focus on costs. He has control over costs and can manage them.”

Former McLaren boss Michael Leiters, who took the wheel in January, is looking to streamline Porsche’s management structure to make savings and speed up decision making, a source familiar with the matter said.

He is also likely to lean on one bright spot from 2025 – strong demand for the iconic 911 combustion-engine model – to try to rebuild the “emotional connection” with the brand’s fan base, the source added.

Like other automakers scaling back their EV ambitions due to weaker-than-expected demand, Porsche has said it will offer plug-in hybrids and combustion-engine models well into the 2030s, alongside all-electric models.

REVEAL HIS CARDS OR KEEP HIS HAND HIDDEN?

But there is a mountain to climb for the Volkswagen-controlled brand.

Porsche’s operating profit plunged 98% to 90 million euros ($105 million) in 2025, and its margin collapsed to just 0.3% – down from 14.5% in 2024 and 18% in the year of its IPO.

It is already cutting costs, saying it will axe 1,900 jobs in the coming years after laying off 2,000 temporary workers last year, with negotiations under way on a second cost-cutting package.

Market conditions seem unlikely to ease. Tariffs cost Porsche hundreds of millions of euros last year, and competition from Chinese rivals such as BYD and Xiaomi is intensifying.

War in the Middle East, and the potential hit to the global economy, could make recovery efforts even harder.

“Even high-net-worth individuals may become more cautious with discretionary spending, which could create another headwind for Porsche,” said Pal Skirta, an analyst at investment bank Metzler.

Leiters’ best move may be to bide his time on any major strategic announcements.

“The risk for him is to say something and have to reverse it,” said Jefferies analyst Philippe Houchois. “So it’s better for him not to show his hand yet.”

($1 = 0.8600 euros)

(Reporting by Rachel More in Berlin; Editing by Christoph Steitz, Adam Jourdan and Mark Potter)