Porsche Faces Sales Decline in China, Plans to Downsize Store Network

On January 13, Porsche released its latest sales figures, revealing a total delivery of 310,700 vehicles globally in 2024, down 3% year-on-year. While four of its five global regions showed growth, China stood out as the only declining market, seeing 2024 deliveries drop 28% to 56,900.

(Source: Porsche)

Porsche entered the Chinese market in 2001. The brand reached its peak in 2021 with 95,700 vehicles sold. However, in 2022, Porsche saw its first decline in China in two decades, delivering 93,300 vehicles, a 2.5% drop from the previous year. This downward trend continued with a 15% decline in 2023, totaling 79,300 vehicles, and persisted into 2024.

To address the slump, Porsche increased its investment in technology within China. On December 4, 2024, the company announced the establishment of a new technical division in Porsche China, overseeing local R&D, procurement, and quality assurance.

In September 2024, Alexander Pollich succeeded Michael Kirsch as CEO of Porsche’s operations in China. One of Pollich’s primary strategies was to scale down Porsche’s sales network in China, reducing the number of outlets from 150 to 100 by 2026—a rare move among luxury carmakers.

Rumors of layoffs in Porsche’s China operations surfaced late last year, though the company denied any such actions. Instead, Porsche acknowledged an internal restructuring aimed at improving efficiency and optimizing costs, which involved adjustments to both direct and indirect workforce expenses.

Additionally, several Porsche outlets in China abruptly closed at the end of 2024. The brand also canceled promised New Year gifts for customers and its traditionally significant test drive events, signaling efforts to cut costs and improve efficiency.

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Porsche’s struggles in China are partly due to broader challenges in the luxury automotive sector, which has seen cooling demand. Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA), attributed this to a temporary dip in the purchasing power of high-net-worth consumers or a shift toward domestic high-end brands.

Chinese manufacturers have gained ground in the luxury market amid the rise of electrification and smart technologies. Brands like Huawei HarmonyOS-powered vehicles, Li Auto, and NIO are capitalizing on advantages in design, space, performance, and smart features, increasingly appealing to high-end consumers.

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