Porsche's New CEO Makes Debut Facing Challenges, Clearly States No Local Production in China and Refuses to Get Involved in Price Wars

After 70 days in office, Porsche’s new global CEO, Michael Leiters, finally made his “debut,” which he had hoped to delay a bit longer.

On March 11, Porsche held its 2025 fiscal year press conference in Stuttgart, Germany. Leiters appeared publicly for the first time as the global CEO.

Leiters admitted he had hoped to schedule this earnings release later. The reason was straightforward: many questions remain unanswered. He openly acknowledged that Porsche is facing challenging times and has not met its own or the market’s expectations in a turbulent world.

Porsche’s global CEO Michael Leiters (left) and CFO White Yuhan (right)

On that day, Porsche announced its challenging financial results for 2025. The company sold 279,449 vehicles worldwide, a 10.1% decrease year-over-year. China’s market continued its decline for the fourth consecutive year, with a total of 41,938 units delivered, down 26% year-over-year.

Revenue also declined, but by a smaller margin than sales. In 2025, Porsche Group’s revenue was €36.27 billion (compared to €40.08 billion in 2024), down 9.5%. Operating profit dropped from €5.64 billion to €413 million, impacted by approximately €3.9 billion in special expenses. These included product strategy adjustments and company scale optimization (about €2.4 billion), additional costs related to battery-related businesses (about €700 million), and the impact of U.S. tariffs (about €700 million). The group’s sales return on sales was 1.1% (2024: 14.1%), within the forecast range after the last adjustment. Automotive EBITDA margin fell to 13.3% (2024: 22.7%), but remained above the previous forecast after adjustments.

Despite facing significant challenges globally in 2025, Leiters emphasized: “We see current challenges as opportunities and will take bolder actions.”

Since taking office in January, Leiters has clarified core strategic areas. The company’s 2035 strategic blueprint is currently being developed and will be announced this fall. It will serve as a roadmap to restore Porsche’s financial resilience and profitability.

Leiters views this as a comprehensive transformation. His path is clear and firm: “We must make the company leaner, more responsive, and our products more desirable.”

He has outlined a preliminary “2035 Strategy”: “We are considering expanding our product lineup to grow in higher-margin segments. From two-door sports cars to Cayenne, we are developing models and derivatives that go beyond our current offerings.”

“I have no doubt we can lead Porsche to a revival,” Leiters said confidently and calmly. “But it won’t happen overnight. It takes time, discipline, and determination.”

Porsche expects the market environment in 2026 to remain challenging. For example, in China, the luxury segment continues to face pressure, especially in the pure electric vehicle market, where fierce price wars are ongoing. CFO White Yuhan predicts that 2026 sales in China will be lower than in 2025, and the number of dealer outlets will be reduced to 80.

However, Porsche refuses to engage in price wars. “Because we know that frequent discounts erode residual values and damage brand premium, which is like drinking poison to quench thirst. Our goal is not to chase volume or market share but to ensure that every vehicle delivered maintains Porsche’s deserved value.”

Additionally, Leiters clearly stated that China remains an important market for Porsche, but there are no plans to establish local manufacturing there at this time. “Any major investment decision must undergo strict scrutiny, as it involves not only huge capital but also complex systems from building factories to integrating local supply chains. At this stage, it’s not our priority.”

Looking ahead to capital markets, Leiters added: “Through the ‘2035 Strategy,’ we will lay a solid foundation for the future, achieving sustained strong cash flow, excellent performance, and profit margins that meet Porsche standards.”

Porsche expects its group sales return on sales in 2026 to be between 5.5% and 7.5%. This forecast is based on an expected revenue of approximately €35 billion to €36 billion. Porsche also anticipates that the net cash flow profit margin for the automotive business will be between 3% and 5%.