Key Highlights
- Porsche plans to raise prices in Europe and the US by 4-8% to combat higher costs caused by supply chain disruptions and semiconductor shortages.
- Despite these challenges, Porsche’s Q1 2022 operating profit rose to €1.84 billion, a 25% increase from last year.
- It reaffirmed its target of hitting a return on sales of 17-19% on revenue of €40-42 billion by 2023.
German automaker Porsche has announced plans to increase prices by 4% to 8% in Europe and the US in the second half of the year to counter the impact of rising costs, which weighed on the company’s returns in the first quarter.
The company has been grappling with supply chain issues, particularly the supply of semiconductors and parts for the electric Taycan’s high-voltage heating system. However, according to Chief Financial Officer Lutz Meschke, Porsche expects the issues to ease in the coming months.
Operating Profit and Revenue Surge in Q1 2022 Despite Supply Chain Disruptions
In the first quarter:
- Porsche reported a rise in operating profit to €1.84 billion ($2.03 billion), up from the previous year when the auto industry faced significant supply chain disruptions.
- Revenue also increased to €10.1 billion.
- Deliveries rose by 18% to 80,767 vehicles, with a significant increase in China.
Porsche Affirms 2023 Targets, Plans All-Electric High-Performance Crossover for 2026
- Porsche has reaffirmed its targets for 2023, aiming for a return on sales of 17% to 19% on revenue of €40 to €42 billion ($44.1-$48.5 billion).
- The automaker’s return on carmaking was 18.2% in the first quarter.
- However, the operating profit of Porsche’s financial services arm declined to €86 million from €102 million due to the valuation of interest rate hedges and derivatives and the impact of the interest rate rise on financing products.
Porsche, majority-owned by parent company Volkswagen Group, plans to move further upmarket to take on competitors like Ferrari. The automaker is targeting a more than 20% operating margin and is planning an all-electric high-performance crossover above its Cayenne, scheduled for around 2026.
Porsche’s plans for growth and increased profitability are ambitious. Still, the company must navigate the ongoing supply chain challenges that have affected the wider auto industry, including semiconductor shortages and logistics issues, to achieve its goals
