Mired in Difficulties

Porsche appears to be enduring an endless stretch of turbulent times.

Plunging profits, the closure of nearly half of its dealerships, and the shutdown of its self-built charging stations... Porsche has been under the spotlight this year due to a series of negative events.

During the Q1 earnings call, Porsche’s CFO officially confirmed that the fuel-powered Macan will be completely phased out. Sales in the European market ceased as early as 2024, while inventory sales in markets such as China will persist until 2027.

The significance of the Macan to Porsche cannot be overstated. Launched in 2013, the Macan is a mid-size SUV sharing its platform with the Audi Q5, breaking the stereotype that 'Porsche equals exclusivity and high prices.' Since its debut, it has consistently been a favorite and one of Porsche’s best-selling models. In 2025, global deliveries of the Macan reached 84,328 units, up 2% year-on-year, accounting for 30% of Porsche’s annual sales. Among these, 45,367 were all-electric Macans, and 38,961 were fuel-powered Macans. Even when considering only the deliveries of fuel-powered Macans, it still outperformed models like the Panamera and 718 series, remaining a key sales contributor for Porsche. Thus, the news of its complete phase-out quickly sparked controversy. In response, Porsche executives stated that after a decade since the Macan’s launch, some body components have become technologically outdated, and parts suppliers have gradually ceased production, leading to potential shortages and escalating manufacturing costs. Although Porsche plans to maximize production during the final cycle, parts supply has become a critical constraint. Additionally, due to the absence of a new generation, the Macan fails to comply with the EU’s latest cybersecurity and driver assistance regulations. Upgrading the old platform would involve exorbitant costs and technical challenges, with a severe imbalance between investment and returns, ultimately necessitating its phase-out.

While sales in the Chinese market will continue until next year, China is no longer Porsche’s largest market, and extending the sales of the fuel-powered Macan in China for another year cannot reverse Porsche’s declining fortunes. Moreover, a tough patch in the popular mid-size fuel-powered SUV segment seems inevitable.

Porsche’s 2025 financial report revealed that its annual revenue reached €36.27 billion, down 9.5% year-on-year, while operating profit stood at €413 million, a 92.7% decline. Thus, when Porsche recently announced its agreement to sell its entire stake in the Bugatti Rimac joint venture and its holdings in the Rimac Group, it was seen as a desperate move to ensure survival, evoking regret.

Customer Attrition

Porsche’s declining sales underscore that no brand is immune to replacement.

Despite maintaining a haughty stance amid intense competition from Chinese automakers, the reality is that many luxury brand users have switched to Chinese brands following the latter’s successful foray into the high-end market.

Latest data shows that Porsche delivered only 7,519 units in China in Q1 this year, a staggering 21% year-on-year drop. Prior to this, Porsche’s Chinese sales had already declined for four consecutive years, with fewer than 42,000 units delivered in 2025, a 26% decrease. Compared to its peak in 2021, sales have shrunk by nearly 60%.

Porsche has publicly projected that its Chinese market sales will drop to 30,000 units by 2026, nearly a 70% plunge from the 2021 peak.

In response, Porsche, once flush with cash, has begun tightening its belt: it plans to reduce the number of 4S dealerships to 80 by 2026, eliminating nearly half of its dealers. Simultaneously, starting in March 2026, it will systematically dismantle its self-built charging stations, affecting approximately 200 stations nationwide.

In stark contrast, Mercedes-Benz and BMW, despite facing sales declines, have joined forces to establish a charging station company to enhance mobility services in the luxury segment, accelerating the creation of an exclusive charging network.

At the 2025 earnings briefing, Porsche’s Global CEO Oliver Blume stated, 'Price wars erode brand DNA. We’d rather sacrifice market share than compromise the driving experience and luxury essence of every Porsche.'

However, news of 'Porsche prices dropping below €400,000' trended online. When both product and brand value decline, the sense of luxury inevitably suffers a 'downgrade.'

In recent years, Chinese automakers have risen strongly, redefining luxury with technology in the domestic market and achieving global success. As the most iconic luxury brand of the fuel-car era, Porsche’s predicament reflects a broader crisis across traditional luxury brands.

Currently, Porsche lacks a blockbuster new model to lead the way while facing the phase-out of its best-seller. The all-electric Macan, launched in 2024 and based on the PPE platform jointly developed with Audi, is not yet capable of filling the void left by the fuel-powered Macan. Its successor is reportedly not arriving until 2028.

Can Porsche navigate this tough patch of missing best-sellers?

Desperate Measures for Survival

Whether phasing out the fuel-powered Macan or selling Bugatti, these moves signal Porsche’s increasingly dire situation, according to industry observers.

In March, Porsche’s 2025 financial report revealed that revenue fell from €40.08 billion in 2024 to €36.27 billion, a 9.5% drop, while sales profit plummeted from €5.64 billion to €413 million. During the reporting period, Porsche’s return on sales stood at 1.1%, compared to 14.1% in 2024.

A key reason for Porsche’s evaporating profits was a €3.9 billion special expense: approximately €2.4 billion was allocated to 'product strategy adjustments and company scale optimization.' In September 2025, Porsche announced the termination of in-house battery production, delayed launches of all-electric models, and extended the lifecycle of fuel-powered vehicles. These adjustments not only incurred massive write-offs but also exposed the recklessness and inconsistency of its previous electric transformation.

Such 'strategic missteps' have plagued nearly all ultra-luxury brands. Lamborghini, Aston Martin, and others have also scaled back their electric ambitions, delaying all-electric model launches, reflecting a collective crisis in the global ultra-luxury car market.

Thus, Porsche’s sale of Bugatti is seen as a key method to adjust its asset structure and recoup funds to address current challenges.

Bugatti’s annual production is extremely limited, typically under 100 units, yet R&D costs for each model reach hundreds of millions of euros. Throughout automotive history, this high-investment, low-output model has made ultra-luxury brands like Bugatti prime targets for divestment during cash flow crises. The Bugatti joint venture is valued at approximately €1 billion (around RMB 7 billion).

Porsche’s CFO Jochen Breker stated, 'We expect 2025 to be Porsche’s nadir, with significant improvement starting in 2026.' Porsche China’s President and CEO Michael Kirchert also publicly declared that 2025 would be a year of recalibration, with Porsche relaunching its 'offensive mode' in 2026 to regain the Chinese market.

Now, nearly half of 2026 has passed.

This article is original to China News Auto. Sharing is welcome, but media outlets must credit the author and source before reprinting. Any media or self-media creating video or audio content from this article will face legal consequences.