Porsche: Disaster doesn't go alone!

Car K-line

2024-05-27 08:21Posted in Beijing Automotive Creators

Introduction: Porsche's sales plummeted, are Xiaomi cars to blame?

It's not that the rich in China can't buy it, but that Xiaomi cars are more cost-effective.

"Maybe it's a good design, always have a heart!" Do you still remember the ridiculous remark of Porsche China CEO Ke Shimai on April 14?

A month later, when Porsche announced its financial results for the first quarter of 2024, the Xiaomi SU7, which had been connotated by the Germans, had been on the market for a month and a half and had completed the delivery of 10,000 units.

Compared with the hot sales of Xiaomi SU7, Porsche, a Stuttgart horse, has completely failed to gallop in the Chinese market.

Porsche's financial report shows that in the first quarter of 2024, the sales volume in the Chinese market will only be 16,300 units, a sharp decrease of 23.5% year-on-year. In the same period, the sales volume of China's passenger car market was 5.687 million units, a year-on-year increase of 10.7%.

"Image source: Porsche 2024 Q1 Report"

Since the third quarter of 2023, Porsche's sales in China have plummeted by nearly 40% year-on-year, and Porsche has suffered three consecutive quarters of year-on-year sales declines in China.

In 2023, Porsche's sales in China will be less than 80,000 units, a year-on-year decline of more than double digits, making it the company's only large-scale single market in the world.

Looking back at the market performance in January ~ April this year, combined with the current order situation of Xiaomi cars, whether Porsche's sales in the Chinese market can exceed 70,000 units in 2024 must be drawn with a big question mark.

To make matters worse, in the North American market, where sales still increased by 9% last year, sales exceeded 15,000 units in the first quarter, but fell by 23.2% year-on-year, almost the same decline as the Chinese market.

Porsche's sales in the world's two most important markets suffered at the same time, and as a direct consequence, it delivered 77,600 new cars worldwide in the first quarter, a year-on-year decrease of 3.9%.

At the same time, the sales price of the Porsche terminal has continued to fall, and the terminal discounts of the Taycan and Macan are more than 15% towards the end of their life cycles, the Cayenne and the 718 are more than 12%, and the once-popular Panamera and the top-of-the-line 911 are also being advertised with 10% promotions from time to time.

The simultaneous sharp drop in sales volume and terminal price may put more than 150 sales outlets in Porsche China under great operating pressure.

"Image source: Porsche 2024 Q1 Report"

Affected by the above factors, Porsche's operating income in the first quarter was 9.011 billion euros, a year-on-year decrease of 10.76%; Operating profit was 1.282 billion euros, down more than 30% year-on-year.

In addition, the company's sales margin fell to 14.2% from 18.2% in the same period of 2023, a full decrease of 4 percentage points. The gross profit margin of the automotive business also decreased by 1 percentage point to 23.4%.

In this regard, Porsche explained in the financial report that the main reason for the poor performance in the first quarter is that the products are in the renewal stage, and at the same time, the wait-and-see sentiment of Chinese consumers due to the economic environment has increased, as well as the impact of customs clearance problems in the United States.

However, in the view of "Auto K-line", as of May 9, Xiaomi Auto announced that it has more than 100,000 Xiaomi SU7 lock orders, and Xiaomi Auto's Beijing factory is working overtime to produce Xiaomi SU7, which may be the biggest challenge to Porsche.

However, at the critical juncture when the performance was under great pressure, Porsche raised prices in China against the market. In the middle of this month, its official website showed that due to configuration adjustments, the price of all Cayenne series was increased by 20,000~50,000 yuan; Earlier in April, there was a Panamera price increase of 70,000~100,000 yuan for the same reason.

Blume, chairman of the executive board of Porsche AG, has previously said that Porsche faces challenges in the Chinese market, but has no intention of joining a fierce price war.

At a time when car companies are generally looking to exchange price for volume, Porsche bucks the trend, perhaps hoping to maintain the relative scarcity of products by raising the entry threshold, so as to maintain its brand positioning and avoid falling into a lose-lose situation in terms of sales and profits.

However, during the Beijing Auto Show, Liu Jie, vice president of Li Auto Commercial, admitted that "the forecast for this year's market is too optimistic". According to the data, the overall sales of China's passenger car market of more than 300,000 yuan fell by 12% in the first quarter of this year, and the price of traditional luxury brand fuel vehicles decreased by 10%~15%.

In such a market environment, only a quarter of Porsche's price of Xiaomi cars came to "pay tribute", how long can the Porsche brand tonality be maintained?

"Automobile K-line" visited a number of Porsche Centres in Beijing and found that although the official raised the price of individual models, the terminal discount is still not small. For example, the 2024 Panamera has a maximum discount of nearly 100,000 yuan, while the Taycan can have a maximum discount of 7%.

The price increase may cause a further decline in its sales in China, and the continuous price reduction will backstab old car owners and affect the brand premium.

If the decline in Porsche's sales in 2023 is due to the economic environment, 2024 may be the emergence of new opponents, and it is completely out of common sense, which has left Porsche without much power to parry.

At present, Porsche, it is difficult to ride a tiger.

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