Updated March 12th, 2024 at 14:07 IST

Porsche anticipates lower returns in 2024 amid launch of new models

In the fiscal year 2023, Porsche recorded sales amounting to €40.5 billion, closely aligning with estimates.

Reported by: Business Desk
Porsche | Image:Pixabay
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Porsche 2024 performance: German luxury carmaker Porsche anticipates a slight dip in profitability for the year 2024 as it shifts its focus towards the introduction of four new models. Despite market volatility, the company's full-year results for the previous year align closely with expectations.

Owned primarily by Volkswagen, Porsche eyes an operating return on sales ranging between 15-17 per cent for the year 2024, a modest decline from the impressive 18 per cent achieved in 2023. Lutz Meschke, Porsche's finance chief, reiterated the company's medium-term target of maintaining an operating return on sales around 17-19 per cent and expressed long-term ambitions for a group operating return on sales exceeding 20 per cent.

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However, Porsche's Frankfurt-listed shares are expected to commence trading at a 3.2 per cent lower opening, reflecting investor sentiment. While the shares have seen a modest year-to-date increase of 1.8 per cent, they trail behind the broader STOXX Europe 600 Automobiles & Parts index, which has surged by 10 per cent. Analysts attribute this underperformance to intense competition in key markets like China and the anticipated expenses associated with the launch of new models this year. In contrast, shares of competitor Ferrari have soared by approximately 25 per cent during the same period.

Volkswagen, Porsche's parent company, recently cautioned that sales growth may decelerate in 2024 due to various challenges such as tepid economic expansion, heightened competition, and elevated costs.

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In the fiscal year 2023, Porsche recorded sales amounting to €40.5 billion, closely aligning with estimates. Notably, the company exceeded expectations with an operating margin of 17.7 per cent.

With plans to unveil four new models across its Panamera, Macan, Taycan, and 911 lineups in 2024, Porsche anticipates its most significant year of product launches in its storied history.

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(With Reuters inputs.)
 

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Published March 12th, 2024 at 13:23 IST