PORSCHE’s 99% profit goes down the trouble of luxury brands all over the world
Porsche’s dollar loss last week isn’t just a setback for one of the world’s most profitable cars – it’s a warning shot to the entire luxury economy. After years of record profit records are being dismantled with a cheap settome and the post-pandemic “Carmaker Carmaker Slowdown which shows that even the most faded brands in the world are losing Alratuty as Global Deals Pools.
The company reported a loss of € 966 billion. Porsche exploded weak demand in China, reducing Electric Vehicle Chieler (EV) sales and the cost of increased tax rates. It also announced a pause in its EV expansion and the departure of a longtime chief executive from his role at Porsche AG.
Porsche is now one of the crown jewels of its parent company, the Volkswagen group, which owns Bentley and Lamborghini. The product occupies a unique niche in the vw range, combining justice with scale. SUVs like the Cayenne and Macan transform Porsche from a niche Sports-Car maker into a global luxury powerhouse.
Profits are set to record highs after the pandemic, driven by eager buyers who were ready for luxury purchases when credit was at its highest and consumer spending was high. Now, since those were poor, Porsche is facing a recalculation.
Porsche’s China business, which once accounted for about 20 percent of its global sales, is expected to decline by more than 20 percent in the first nine months of 2025, reporting weak competition and growing competition from Byd and Xiaomi. (The company isn’t alone. BMW recently cut its earnings forecast, with costs tied to China and the US. Martin and Mercedes-Benz also reported similar headwinds.
PORSCHE’s EV STALLS STALLS
Porsche has also scaled back its plans for electrification amid EV adoption, even as rivals such as Ferrari prepare to launch their first electric models.
The company planned to produce everything from the 718 boxster to the cayman. However, in September, Porsche said it had “retracted” its EV strategy after concluding that its previous targets were “too aggressive.” The company aims to have 80% of the world’s electricity lines by 2030. Its first EV, Taycan, battery software and battery problems, while Macan EV-finally available now due to software problems. Porsche now plans to focus more on interior models and hybrid models to stop the loss of EV.
Those EV challenges have weighed heavily on the Volkswagen Group’s bottom line. This week, vw reported a loss of 1.5 billion in the third quarter, in part due to the renewal of Porsche’s EV inventory.
The company’s leadership is stirring up chaos. Blume, who has served as CEO of Volkswagen Group and Porsche for the past three years, has faced criticism of the dual role and its potential conflicts. He will step down from his position at Porsche but will remain CEO of the Volkswagen Group, a position he has held since 2015.
Blume is expected to be replaced by Michael Leiters, the former CEO of McLaren, who will take over the day-to-day operations.
The decline in luxury is spreading beyond cars
The broader sector is feeling the pinch as global economic conditions change amid geopolitical tensions, the rise of AI-connected jobs, and growing backlash against virtual food.
Bain & Company Reastrely predicts the “normalization” of the luxury market, writing: “The global financial sector this year is facing its biggest disruption for at least 15 years and difficult social and cultural shifts.”
Luxury giants such as LVMH have seen revenue decline this year, while Interbrand’s Global Brands 2025 report found that the combined value of 13 luxury brands fell by 5 percent. In that list, Porkche’s product value dropped 14 percent year over year.
Although Porsche is not alone in its decline, the message is clear: Even the most exclusive brands are not immune to changing consumer behavior and tightening economic conditions. The question now is whether the power of the name – and the allure of luxury – can endure as the market for more food works off the road.
