Recently, HuXiu Auto noticed that several well-known self-media influencers on Weibo revealed that multiple Porsche dealers are collectively protesting against the inventory pressure on new energy vehicles. The reason cited is that the sales volume is extremely poor and unsustainable. Originally, the internal competition and price wars in the new energy vehicle market were limited to the mid-to-low-end segment. However, this pressure has now spread to the high-end price range.
Dealers Facing Life-and-Death Operating Pressure
It is understood that the reason for the collective protest by Porsche dealers is that the prices of pure electric models such as Taycan and Macan EV are too high and are not selling well. Retail sales are stagnant, but Porsche China still wants to complete wholesale tasks by pressuring dealers to clear inventory. Dealer operating pressures are on the brink of collapse, and after reaching a breaking point, they collectively protested and refused to accept Porsche's inventory pressure.
Not only are pure electric models affected, but sales of Porsche's fuel product line are also declining. In order to clear inventory promptly, dealers have to resort to price reductions, some even resulting in losses. Given Porsche's average transaction price, which is two to three times that of BBA and five to eight times that of Volkswagen and Toyota, dealers are indeed unable to bear the burden.
Currently, some dealers have proposed demands such as stopping new vehicle deliveries, providing subsidies, and changing executives.
Significant Decline in Porsche China's Performance
The conflict between dealers and the automaker's sales company did not arise overnight.
In 2023, Porsche's global sales reached 320,000 units, with a 3% year-on-year increase. However, the sales volume in the Chinese market of 79,000 units was the only market globally to decline, dropping by 15% year-on-year. Last year in the Chinese market, Porsche sold a total of 4,151 Taycans. Although the sales volume is acceptable, it is still significantly lower compared to Porsche's fuel models. In 2024, Porsche's sales decline trend has not stopped, with first-quarter deliveries of 16,430 units, a 25% decrease from the same period last year when 21,365 units were delivered.
In terms of revenue, Porsche's first-quarter 2024 financial report shows an overall revenue of 9 billion euros, a 10.8% year-on-year decrease. Vehicle sales revenue amounted to 8.1 billion euros, down by 12.7% year-on-year. With the dual impact of declining sales volume and transaction prices, Porsche's automotive business gross margin was 23.4%, a 30.3% decrease compared to the same period last year.
Summing up a series of sales and financial data, it can be concluded in one sentence: Porsche itself is also caught in the quagmire of business growth. Economic slowdown coupled with intense price wars in the automotive market have put Porsche, known for its high profit margins, in a growth dilemma.
How the conflict with dealers will ultimately be resolved remains to be seen. I also had a chat with a regional manager responsible for channel management at a luxury brand, who believes that Porsche will likely first lower this year's sales targets to alleviate pressure from all sides and then reach a consensus through negotiations. Subsequently, new commercial rebate policies will be introduced in the form of subsidies to ease the relationship with dealers.
As of now, Porsche China has not responded to this issue. As for how the situation will develop, HuXiu Auto will continue to monitor closely.
