Written by Cláudio Afonso | LinkedIn | X
Porsche plans to lay off 30% of its workforce in China, following reports that the cuts will impact both regular employees and outsourced staff, Chinese media outlet Yicai reported on Tuesday, citing an employee at Porsche China.
Affected employees are expected to receive severance pay plus six months’ salary, according to the report. Between January and October, Porsche sales in China stood at 44,000 vehicles, down 34% from the first ten months of 2023.
The German luxury carmaker saw a 29% decline in sales in China, the world’s largest car market, over the first nine months of the year. The downturn contributed to a 7% drop in Porsche’s global sales, totaling 226,026 units in the January to September period.
Last week, Porsche China President and CEO Alexander Pollich said the company would reduce the number of dealerships in China to address weakening customer demand and lower sales.
“With declining customer demand and reduced sales, optimizing the dealership network has become necessary. We want to ensure our partners stay profitable in the local market,” Pollich said.
Pollich explained that Porsche needs to adjust its dealership channels to maintain the overall health of its sales network in China. The company plans to streamline its network over the next two years, keeping about 100 dealerships by the end of 2026. Currently, and according to Chinese media outlet IT Home, Porsche operates 138 dealerships in the country.
At the third quarter earnings call, Porsche’s chief financial officer Lutz Meschke announced that Porsche would significantly reduce its dealership network in China. Operating profits fell by 41% to €974 million for the July-to-September quarter. Revenue also decreased to €9.1 billion from €9.7 billion, although Porsche kept its full-year financial outlook after lowering it in July.
Written by Cláudio Afonso | LinkedIn | X
