Porsche’s profit warnings pile pressure on Blume to give up dual CEO roles
Luxury-car maker has been among the worst hit by market’s slow shift to EVs
Porsche’s third profit downgrade in six months has increased pressure for Oliver Blume to give up his dual chief executive roles at the German luxury-car maker alongside Volkswagen as investors prepare for a costly retrenchment of its electric vehicle ambitions.
Shares in Porsche fell as much as 9 per cent before closing down 8 per cent, while VW dropped 7 per cent on Monday after the company warned late last week of a €1.8bn hit to its full-year operating profit as it laid out the expansion to its petrol and hybrid line-up. Its parent company VW announced a €5.1bn dent to its annual profits.
“Porsche is still a very complex case for the next few years so the sooner the better that they have a full-time CEO,” said UBS analyst Patrick Hummel.
The global car industry has struggled with the expensive and slower than expected transition to electric vehicles in Europe and the US. But Porsche has been one of the worst hit after leaning too heavily on EVs and failing to produce petrol successors to best-selling models such as Macan and Cayman.
Frank Schwope, a lecturer for automotive management at the University of Applied Sciences FHM Hannover, said whether Porsche could turn things around quickly depended on the speed of its search for a successor to Blume, who has been chief executive for both companies since 2022: “It is clear that CEO of VW or CEO of Porsche cannot be a part-time job.”
At the start of the month, Daniela Cavallo, the head of Volkswagen’s powerful works council, also called on Blume to end being a “part-time boss” of the German group. “This situation must end,” she told workers according to a post on VW’s intranet.
Blume has previously said his dual role was not “designed for eternity” and that a changeover would be made after the company had resolved “key issues”.
On Friday, Porsche said it would scrap the planned release of a new range of EVs positioned above the Cayenne and would initially offer only the petrol or plug-in hybrid versions.
The “focus on electric vehicles, alienating existing customers for combustion engines” was “damaging”, added Schwope.
On Friday, Blume insisted the company had hit its “final milestone” in its product overhaul, pointing to “full flexibility” in its internal combustion engine, hybrid and fully electric offerings.
“It’s going to be a tough and long road, and it will demand our full focus and strong effort,” he said on a call with investors.
But Hummel at UBS said the company still needed to make more painful decisions to cut its cost structure as it struggles with flagging sales in China and new risks created by US tariffs on cars imported from Europe.
“We believe the risk is still very high that China remains on a decline path for Porsche,” he said. “But they are not cutting costs fast enough and aligning the size of the organisation to the shrunk volumes.”
The decision to de-emphasise its investments in EVs also comes at a time when other rivals are ramping up their battery-run car sales in parallel with hybrid and petrol models. Market conditions will probably be very different by the time the new generation of Porsche’s petrol models comes out three years later, cautioned some analysts.