Porsche sets long-term margin goal of 20%

Porsche, already one of the world’s most profitable automakers, plans a long-term operating return on sales of more than 20% with its new Road to 20 programme.

It expects sales to rise to as much as €42bn (R814bn) this year after reporting record earnings and revenue in 2022.

CFO Lutz Meschke, however, warned that supply chain issues, geopolitical strains and rising inflation still presented a challenge for the industry.

Porsche reported a 27.4% rise in annual profit to €6.8bn and revenue of €37.6bn in 2022. Deliveries rose 2.6% to nearly 310,000 cars, a new record for the German carmaker.

The company, historically a huge money spinner for the Volkswagen Group, is targeting a rise in revenue to €40-€42bn this year and a margin of 17%-19%.

The luxury carmaker’s outlook chimes with competitors such as Ferrari, Aston Martin and former parent Volkswagen , who vowed stronger results in 2023 as the end of 2022 provided some relief from supply chain bottlenecks that had weighed on the first nine months of the year.

“Our keys to success are improved price positioning, a strong product mix, increased group sales, currency effects, and last but not least, our consistent cost discipline,” Meschke said.

Shares in the company have risen around 30% since it started trading on the market at €82.50 last September. Porsche overtook Volkswagen as Europe’s most valuable carmaker within a week of its stock market debut on the Frankfurt Stock Exchange.

New models

As Porsche turns 75 in 2022 it is pursuing an ambitious electrification strategy that will see more than 80% of its new vehicles being fully electric by 2030. It will start with the all-electric Macan in 2024, followed shortly afterwards by the electric 718 Boxster and Cayman, and electric Cayenne. The iconic 911 will be offered with an internal combustion engine (ICE) for as long as possible, said Porsche, but there will be a petrol-electric hybrid variant.

In the second half of the decade Porsche will expand its product portfolio with an all-electric luxury SUV positioned above the Cayenne. The name of the vehicle and technical details have not been confirmed yet.

During 2023, the Cayenne is set to undergo one of the most comprehensive upgrades in the history of Porsche. The updates to the third-generation model include three further-developed plug-in hybrids with greater ranges.

Porsche already has an electric vehicle in the Taycan, which has become one of the brand’s most popular offerings

The carmaker has also set itself ambitious sustainability targets, working towards a net carbon neutral value chain for its vehicles in 2030.

This includes the use of e-fuels in ICE cars, and in 2022 Porsche set up an e-fuels pilot plant with partners in Chile. E-fuels are renewable electricity that has been converted into a combustible, liquid fuel using CO2 captured from the atmosphere. Porsche and Ferrari are among automakers seeking a carveout for synthetic e-fuels from the EU’s planned combustion engine ban in 2035.

“ICE cars will be on the roads for many years, as not all markets will move to full electric cars at the same time. E-fuels are important for this, and are part of a decarbonisation programme,” said Porsche chairman Oliver Blume at Porsche’s annual press conference on Monday.