Porsche falters in China and suffers multimillion-dollar losses

Porsche is the crown jewel of the Volkswagen Group. The brand, founded in Stuttgart by Ferdinand Porsche, has historically been the most profitable and highest-earning within the Volkswagen Group, especially since 2000, with the introduction of models like the Cayenne and Cayman, cars that went beyond the nine, the flagship product of the German brand.

Over the past ten years, Porsche consolidated its growth in emerging markets outside Europe, especially in the Middle East and China, where it sold 95,000 cars in 2021, compared to just 40,000 units in 2025. Companies like Denza and Xiaomi—aiming to reach the ambitious customers of the Asian giant—have caused Porsche to accumulate a sales drop of over 25% in the Chinese market in the last twelve months, a 58% drop over the last four years, and, more worryingly, to close out 2025 with a decline to forget. To understand the magnitude of this tragedy in China, one need only look at the reduction in Porsche dealerships and authorized service centers in the country, which will fall from more than 150 dealerships in 2024 to just 80 in 2026.

Porsche's situation in China is not an isolated case, as practically all the major European manufacturers have significantly reduced their sales to the global automotive market, a move that greatly alarms the management of the major automotive groups, who had bet on an expanding Chinese market where the sales of European manufacturers have proven wrong and have caught Porsche, Volkswagen and other European manufacturers in a bind.

The Chinese consumer has become a demanding buyer who, all things being equal, prefers to choose local manufacturers even if they lack the prestige and history of European brands. In fact, local manufacturers are investing in technologies and applications that in Europe we would consider frivolous, such as karaoke or rear seats connected to screens and various apps.

An electric bet goes bust

Porsche's other major stumbling block has been its electric strategy. Porsche made a big bet on the TaycanThe Porsche 6, an exceptional electric car that represented a multi-million dollar investment for the brand, but which the market has not received with the enthusiasm the brand expected. Porsche's second electric model has been the... Macan, a fully electric SUV that has also failed to meet the brand's commercial targets.

The low demand for electric models and the difficulty in recouping investments have caused Porsche to accumulate greater losses in its financial balance sheet, dragging the rest of the Volkswagen group brands into a vortex of losses and red numbers.

Nevertheless, Porsche maintains a strong reputation and excellent market position in Europe and the United States, along with a solid and well-established product range in these markets. Finally, the 911 remains the brand's halo model, but the profit margin of its flagship sports car is insufficient to improve the brand's overall sales figures. The arrival of a new generation Macan with a combustion engine and the potential return of the Cayman and Boxster in electric and plug-in hybrid versions with gasoline engines seem to guarantee the brand's long-term viability, provided it is based outside the Chinese market.