Porsche will spend more than €20-billion (R409-billion) in the coming years to equip models including its planned new Cayenne sport utility vehicle with top-line electric and digital technology to bolster returns.
The manufacturer is shifting to battery technology while making sure margins won’t sink, CEO Oliver Blume said Wednesday at Porsche’s first AGM since going public last year. The company is targeting returns of more than 20% in the long term, compared with 18% last year.
The 911 maker remains Volkswagen’s main cash cow as efforts to improve profitability at the parent’s mass-market brands are slow to materialise. Porsche has gained some independence from the cumbersome processes of Europe’s biggest car maker since listing and is now implementing dozens of measures — from building its own software to developing high-performance batteries — to defend returns.
“We’re taking a fresh look at everything, from the product range and pricing to the cost structure,” Blume, who also leads VW, said in a speech.
The CEO has been critical of problems at VW’s software unit Cariad that delayed the launch of key models including Porsche’s electric Macan. He has appointed Sajjad Khan, Mercedes-Benz Group’s former technology chief, to oversee the luxury car maker’s software efforts and is pushing to hire more than a thousand electrification and tech workers.
Porsche also struck a partnership with Mobileye Global on autonomous driving this year and took control of Cellforce, a venture that’s working on high-performance battery cells.
Most valuable
Since listing, Porsche has become Europe’s most valuable car maker. At Wednesday’s AGM, investors warned of its heavy reliance on combustion cars. While the company’s first electric car, the Taycan, has been a success, there are no plans to add a plug to the lucrative 911.
“No other German automaker has a more consistent sporty focus and thus an enormously high dependence on the internal combustion engine than Porsche,” Ingo Speich, head of sustainability and corporate governance at Deka Investment, said in a speech.
Climate activists also staged protests outside the meeting site in Stuttgart, criticising the brand’s role in rising carbon emissions and founder Ferdinand Porsche’s Nazi sympathies. At VW’s annual meeting in May, protesters threw cake and interrupted speeches. — Monica Raymunt, (c) 2023 Bloomberg LP