Vw cuts margin estimates, Audi weighs in. Porsche, deliveries -7%.

Meanwhile, deliveries fell by 7% in the first half of the year for Porsche due to a range undergoing extensive renewal and a further drop in demand in China. The Volkswagen Group's luxury sports car brand now expects margins of 15-17% for this year, instead of 17-19%, on sales of EUR 42 billion. Profitability is estimated to improve next year, thanks to the updating of the model range.

The prestigious German brand sold 155,945 vehicles in the year to June, with growth in Europe failing to offset declines in China and North America, according to a statement from the Zuffenhausen (Stuttgart)-based company. The drop in sales in China accelerated, with deliveries falling by 33 per cent. In the emerging markets the drop was 2 per cent, in the USA 6 per cent. This compares with growth of 22% in Germany and 6% in the rest of Europe. Porsche's performance has lost momentum in recent months, with the company posting its weakest first-quarter result since its IPO in September 2022.

Shares moderately in positive territory on Tuesday, but rebounded sharply on Wednesday. The shares rose 4%, among the best of the blue chips in Frankfurt, after positive comments from brokers following a call with investors. Performance over the past twelve months (-34%) and since the start of the year (-5.5%) remains negative. Capitalisation at EUR 66 billion, far from the all-time high of April 2023.

One trader said Porsche reported an improved sequential margin and better cash conversion for the second quarter, the latest sign that high-margin luxury cars offer some margin protection in the face of the weakening Chinese market.

The manufacturer of the iconic 911 said that this is likely to be the lowest point of the year. Certainly, luxury car buyers have become more selective, with demand in China declining due to the prolonged property crisis and weaker economy. A situation made more complicated by increased competition in the premium electric car market.

In April, Porsche warned that the introduction of new models, including the Macan compact SUV in an electric version and theglorious, revamped 911 (with the new hybrid drive), would weigh on production and profits. Sales of the Macan dropped by 18%, while shipments of the Panamera fell by a quarter. Sales of the electric Taycan plummeted 51% in anticipation of the new version. Well Cayenne (+16%) and 911 (+8%).

"In 2024, we will put Porsche's most powerful product portfolio of all time on the road," said Detlev von Platen, Porsche's head of sales, adding that the manufacturer will continue to offer combustion engine vehicles along with plug-in hybrid models and electric cars.