Analysis-Porsche's new CEO will inherit old problems

By Rachel More, Nick Carey and Ilona Wissenbach BERLIN/LONDON/FRANKFURT (Reuters) -Porsche's outgoing CEO Oliver Blume has one more quarterly report to deliver on Friday before his decade-long tenure comes to an end. It won't make for pretty reading. The German sports car maker is set to post a deep operating loss as it finds itself wedged between a severe slump in top market China and pressure from U.S. tariffs, while undergoing a costly reversal of its shift to electric cars. In a bid to fix things, Porsche has appointed ex-McLaren boss Michael Leiters as the next CEO who will take the wheel in January, hoping to revive demand in China and unpick the EV conundrum. Investors remain to be convinced. "After several profit warnings in a year, visibility for the business model remains very limited," said Ingo Speich of Deka Investment, which holds about $48 million of Porsche stock. He added that Leiters' experience at higher-end rivals McLaren and Ferrari signalled where the company might go. CAN NEW CEO LEAD PORSCHE INTO AN ELECTRIC ERA? Porsche has emerged as one of the biggest casualties in Europe's besieged auto sector. Since listing in 2022, the company has lost around half of its market value. Speich said Porsche needed to win back consumers in China and get buyers used to its roaring petrol engines to embrace electric. "Porsche faces a major challenge: in the luxury sports car segment, electric vehicles have not yet been accepted by customers. The key question is: will the new CEO succeed in leading Porsche into the electric vehicle segment?" he said. Later on Friday, Porsche is expected to report a 611-million-euro ($713-million) operating loss for the third quarter, according to the average forecast of 15 analysts polled by Visible Alpha, against a 974-million-euro profit last year. This reflects up to 1.8 billion euros in expenses related to delays in its EV rollout. FIXING PORSCHE COULD TAKE 3-5 YEARS Blume, who will remain CEO at Porsche's parent Volkswagen, said last quarter he expected "positive momentum again from 2026 onwards" at Porsche, but analysts are less rosy. Metzler Bank's Pal Skirta said that fixing the problems could take three to five years. Leiters will have to implement a restructuring programme that envisages 1,900 job cuts in the coming years, on top of 2,000 layoffs for temporary workers this year, with a second package of measures currently under negotiation. With 32,195 cars delivered to China during the first nine months of 2025, sales there have more than halved from the same period in 2022. Meanwhile, Porsche's margins have plunged from 18% during the year of the IPO to 2% at best this year. BETWEEN PETROL ENGINES AND ELECTRIC Speich said Porsche could manage the current 15% U.S. import tariff. The real challenge would be to work out a future for its high-performance cars in an electric era, and how to revive the brand in China. The chance of returning to high margins in that market is remote, though, unless Porsche can pinpoint what Chinese consumers are willing to pay premium prices for, said Tu Le, founder of consultancy Sino Auto Insights. "Because it's not the brand (to have) anymore, at least not in the most important market in the world." ($1 = 0.8575 euros) (Reporting by Rachel More in Berlin, Nick Carey in London and Ilona Wissenbach in Frankfurt. Additional reporting by Christoph Steitz. Editing by Adam Jourdan and Mark Potter)

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