The aim is to develop new cars with combustion engines or plug-in hybrid drives and to offer more special and exclusive equipment. Group CEO Oliver Blume is accepting a significant drop in the operating margin, as the VW Group subsidiary surprisingly announced on Thursday evening. According to preliminary figures, the company was already under significant pressure last year. The management held out the prospect of a stable dividend.

Analyst sees necessary changes
Investors have hardly enjoyed the share for some time now. The record rally following the IPO in September 2022 only lasted a few months until the record high of just over EUR 120 was reached in May 2023. The share price then fell and is currently only worth around half as much as it was at its peak and is a good quarter below the issue price of EUR 82.50.

In an initial reaction, JPMorgan analyst Jose Asumendi spoke of necessary changes. They are a positive step with regard to the drive strategy and will enable the car manufacturer to return to growth in the next two years. He cut his profit expectations due to the upcoming financial burdens.

Margin slips further
This year, the margin is likely to slip to as low as ten to twelve percent due to the expensive program to strengthen short and medium-term profitability, but also due to market-related reduced sales expectations.

 For the current year, the management expects the measures to have a negative impact of up to around 800 million euros on cash flow in the Automotive Division (net cash flow automotive) - i.e. excluding financial services.

Porsche actually has completely different ambitions: In the long term, Blume wants to achieve a return on sales of more than 20 percent. Alongside Audi, the sports car brand was a major earnings pearl in the Volkswagen Group structure. Volkswagen as a group even had to cut its profit forecast twice in 2024. A spokesperson for the VW Group did not wish to comment on Porsche's announcement on Thursday evening. Analysts recently expected the situation in the Group to improve again somewhat in the fourth quarter.

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