Porsche bets on fewer, pricier cars as it plans to shrink its workforce by a quarter

Porsche laid out a plan on Wednesday to make more money from selling fewer cars, promising to shrink its workforce by a quarter, cut 40% of its management jobs, raise prices on its most expensive models and set a new target for the cash its car business generates.

Michael Leiters, chief executive since January, presented the strategy, called Sportwagenschmiede '35 (roughly, "sports car forge"), at a capital markets day at Porsche's development center in Weissach, near Stuttgart. "At the moment, the main focus is on reducing costs and making the company more financially robust," he said. The plan follows a collapse in profits: Porsche's operating return on sales fell to 1.1% in 2025 from 14.1% a year earlier, after about 3.9 billion euros of extraordinary costs, mostly from rethinking its product plans and resizing the company, with the rest from battery operations and U.S. tariffs.

The new targets

Porsche kept its medium-term goal of a 10% to 15% operating return on sales and added a new one: an automotive net cash flow margin of 9% to 12%. It is aiming for group sales of 41 billion to 45 billion euros, up from 36.27 billion euros last year, and longer term for a 15% return on sales and a 12% cash flow margin. It did not put a date on the medium term, and said reaching the top of the ranges would require a better economic, geopolitical and regulatory backdrop or further measures.

Those goals sit well above where the business is now. In the first half of 2026, Porsche's return on sales was 7.8% and its automotive net cash flow margin 6.7%, and its full-year forecast, last reaffirmed in July, is 5.5% to 7.5% and 3% to 5%. It plans to pay out at least half of net income as dividends.

Fewer cars, higher prices

At the center of the plan is a lower bar for profitability. Porsche said it will break even on fewer than 200,000 vehicles a year, a figure it said rests on a very conservative forecast for China. It delivered 279,449 vehicles in 2025 and 122,306 in the first half of this year, 16% fewer than a year earlier. Leiters said many parts of the company had been set up to build 350,000 cars, and that China, which took nearly 35% of Porsche's sales at its 2020 peak, would account for no more than a tenth in future, according to the German news agency dpa. He also said: "The 911 will never be electric."

To make up for lower volume, Porsche wants to raise the average selling price of its top-of-the-range models by about 20% in the medium term, offer about 20% fewer model variants and increase revenue from its Sonderwunsch bespoke-car program sixfold. Electric versions of the 718 Boxster and Cayman are expected to support sales in 2028, their first full year of production. A new B-segment SUV with combustion and plug-in hybrid engines will be presented that year and sold alongside the electric Macan. Porsche is also developing a mid-engined supercar platform for a model line above the 911 and is exploring an SUV above the Cayenne.

Who bears the cuts

Much of the saving comes from staff. Porsche plans to cut management positions by 40% and the workforce in direct and indirect functions by 25% in the medium term, with a strategic target of 30%. It employed about 41,800 people at the end of 2025. Part of that reduction is already agreed: a deal with employee representatives this summer cuts 9,000 jobs while securing the jobs of the core workforce until 2035.

Porsche also aims to cut development costs for future model lines by up to 20%, production personnel costs by up to 30% and sales and distribution costs by 20%, and to trim material costs on new vehicle projects by about 10% from earlier plans. It has sold its stakes in Rimac and Bugatti Rimac, agreed to sell its MHP consulting unit and plans to close the development and production activities of Cellforce Group.

A muted market reaction

Porsche's preferred shares rose as much as 5.1% to 44.69 euros in early Frankfurt trading, then fell as low as 41.74 euros before closing up 0.3% at 42.67 euros, leaving them little changed on the day. Jose Asumendi, an analyst at JPMorgan, called the planned cash generation a positive because it would support payouts to shareholders, and estimated that operating cash flow could nearly double from just over 3.6 billion euros last year to more than 7 billion euros by 2028.

Volkswagen owns about three-quarters of Porsche, which it listed in September 2022. Porsche's market value is now about 39 billion euros, compared with slightly more than 60 billion euros for Ferrari, which sells far fewer cars. Last month Volkswagen disclosed a roughly 6 billion euro writedown tied to Porsche.