Porsche rules out U.S. production as restructuring lifts quarterly profit

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Porsche rules out U.S. production

Highlights

Porsche posts Q3 operating profit of 387 million euros versus a 967 million euro loss last year, with shares rising over 2 percent post-results.
Porsche rules out U.S. production despite parent Volkswagen and Audi's $4 billion Georgia factory, planning operations assuming continued 15 percent U.S. tariffs.
Quarterly revenue drops 7.5 percent to 8 billion euros as vehicle deliveries fall 16 percent to 178,532 units in the first nine months, hit by declines in China and Europe.

U.S. manufacturing stance and tariff planning

As reported by Financial Times, Porsche says it does not plan to build vehicles in the U.S., despite parent Volkswagen's separate agreement with the Trump administration tied to Audi's new $4 billion factory in Georgia.

Finance chief Jochen Breckner says Porsche's relatively low production volumes make a U.S. manufacturing shift too complex. He says that even if a shared factory with Audi could create synergies, Porsche would still need to export engines and other parts to the United States and would face duplicate investment needs with suppliers.

Breckner also says Porsche is not expecting tariff relief in its own planning. He says the company is basing its business model on the assumption that 15 per cent U.S. tariffs remain in place.

Volkswagen chief executive Oliver Blume has been negotiating with the Trump administration for more than a year and has pledged large U.S. investments in an effort to secure lower car tariffs, below 15 per cent. It remains unclear whether Audi's investment will translate into broader tariff benefits for the wider VW Group.

Profit recovery and pressure from China

Porsche reports third-quarter operating profit of 387 million euros, compared with a loss of 967 million euros a year earlier, exceeding analysts' expectations for 331 million euros. Its shares rise more than 2 per cent after the results, although quarterly revenue falls 7.5 per cent to 8 billion euros.

The weaker top line reflects continued pressure in China. Over the first nine months, vehicle deliveries fall 16 per cent to 178,532 units, with declines in China, Germany and other parts of Europe.

Under chief executive Michael Leiters, Porsche is relying on a new combustion-engine version of its best-selling Macan, due in 2028, and higher prices for top-end models to support profitability. The company warns the recovery takes time, although automotive net cash flow margin doubles from a year earlier to 11.3 per cent, suggesting some early improvement.

The results also arrive as pressure builds across German carmakers exposed to China. Mercedes-Benz cuts its annual guidance on Tuesday, citing an increasingly challenging market environment in China, and says it now expects an adjusted operating profit margin of 2 to 3 per cent, down from an earlier 3 to 5 per cent range.

In our earlier article on rising U.S. toy prices ahead of the holiday season, we explained how tariffs on Chinese goods and higher energy- and shipping-related costs were pushing shelf prices higher and squeezing manufacturers’ margins. The piece noted that even after some tariff rollbacks, prices can stay elevated because many products were priced under the earlier, higher-duty regime and because broader logistics and input-cost pressures can persist for quarters.

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