Porsche lowers forecasts due to tariffs, China, weak E-car market

STUTTGART: German sports car manufacturer Porsche, part of the Volkswagen Group, has lowered its forecasts due to challenges in China, US import tariffs, and weak demand for electric vehicles, German Press Agency (dpa) reported.

The management now expects revenue for the current year to be between EUR37 billion and EUR38 billion (US$42 billion to US$43 billion), Porsche AG announced on Monday.

Previously, the company had targeted revenue between EUR39 billion and EUR40 billion (US$44 billion to US$45.6 billion).

The target range for the operating profit margin has been reduced by 3.5 percentage points to 6.5 per cent and 8.5 per cent.

Last year, Porsche achieved revenue of EUR40.1 billion (US$45.7 billion) and an operating margin of 14.1 per cent.

The revised outlook reflects US tariffs on car imports from the EU, though initially only for April and May, given the volatile situation and US President Donald Trump's constantly changing priorities.

Porsche is also incurring additional costs, particularly due to its decision not to independently continue expanding high-performance battery production at its subsidiary Cellforce.

Previously, Porsche chief executive Oliver Blume had estimated additional costs of EUR800 million (US$912.8 million) this year due to restructuring and a revised product strategy.

However, this figure is now expected to rise to EUR1.3 billion (US$1.5 billion), further impacting results.

In China, Porsche is scaling back its offerings to align with weak demand. The company is also having to provide greater financial support to its suppliers.

Porsche is set to release its full first-quarter figures on Tuesday.

-- BERNAMA