From being so successful, Porsche is now experiencing a worrying crisis; understand

Porsche has ended a cycle of euphoria and is now facing a reality check. After years of consecutive records, the German automaker saw its operating margin plummet from a healthy 14.1% to a worrying 0.2% in early 2025. The financial result lights up a red alert in Stuttgart and evokes ghosts of the past, referring to the serious crisis that almost led the company to bankruptcy in the early 1990s.

The deterioration of profitability ratios is a direct reflection of a “perfect storm”: high fixed costs and an abrupt drop in demand. Although it surpassed the barrier of 300 thousand vehicles sold in 2024 (totaling 310,078 units), the brand suffered a significant setback in China, its largest market, which compromised global cash flow.

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Increased costs

Analysts point out that Porsche has grown too fast, making its structure heavy and vulnerable. In just over a decade, driven by the success of models such as Cayenne and Macan, the number of employees jumped from 25 thousand to more than 42 thousand employees. This swelling has raised operating costs precisely at a time of difficult technological transition, forcing the company to maintain double investments: in electrification and in the updating of combustion engines.

To stop the bleeding, the board activated the austerity plan called “Structural Package II”. The measures are unpopular: an end to generous annual bonuses, a freeze on automatic wage increases, a reduction in administrative positions and cutting extra breaks on assembly lines. The strictness of the rules for teleworking has also increased.

The restructuring also affects the physical network. In China, the automaker began closing dealerships and charging stations, reducing its presence to about 100 centers. The mission to “clean house” and recover profitability by the end of 2026 now falls to executive management, which needs to prove that Porsche will not repeat the mistakes of three decades ago.