Porsche in crisis due to aluminium shortage: falling profits and plunging shares

German sports and luxury car maker Porsche cut its revenue and profitability estimates due to an unexpected shortage of aluminium alloy supplies. Problems that, combined with difficulties in the Chinese market and delays in software development that have held back the launch of new models, have caused a 7% drop in global deliveries in the first half of the year (-33% in China). Conditions that are causing the highly successful IPO in September 2022 to be forgotten. The shares are down 5% today at EUR 68.94 (after having dropped 6.5%), well below the post-Ipo highs of EUR 120 reached in May 2023. The drop has become more pronounced over the past three months (-24%) and has been over 37% for the past year. Porsche will release its half-year accounts tomorrow.

The Zuffenhausen company now expects sales of between EUR 39 and 40 billion due to damage caused by a flooding event at an unspecified aluminium production plant. Previously it had estimated sales between 40 and 42 billion. The operating margin will be between 14% and 15% for the year, down from the previous estimate of 15%-17%. The prestigious Volkswagen Group brand said in a statement that the compromised aluminium alloy supply would affect production (at least 10,000 units) of all its models, adding that the serious problem would not be recoverable by 2024 and could lead to the closure of one or more vehicle series.

In particular, for the production of the 100% electric Macan a special aluminium alloy is used that is obtained through 'an innovative production process developed by a Norwegian manufacturer'. On 9 July, an agreement was signed in Stuttgart between the Norwegian Norsk Hydro and Porsche to accelerate the use of low-CO2-emitting aluminium. In addition to bodyshells and chassis, Porsche also uses aluminium for the suspension of some models.

Norsk Hydro yesterday did not confirm that it would be able to increase production, or whether it was receiving requests from customers for more product. The American Novelis, which produces body parts and is co-owned by Porsche, announced that its Swiss plant has been closed since 30 June because of the storms and that it has been working with customers to minimise the impact. A spokesman did not confirm whether Novelis is the supplier Porsche referred to in its statement. Novelis is controlled by Hindalco Industries, which in turn is part of the Indian multinational conglomerate Aditya Birla Group. Another aluminium producer, Constellium, listed in the US but based in France, warned in early July that plants in Switzerland had been affected by flooding. And on Tuesday, reporting its results, it said it did not know when it would resume production at its Valais plant. All three companies cite Porsche as one of their customers.

The shortage of aluminium also affected the supply chains of Bmw and Mercedes-Benz Group , but both managed to find alternative suppliers. Spokesmen for the two German companies did not provide further details.