WionDrive News Desk 
Porsche expects its profit margins to go down this year as it plans launch of four new models, hoping those will carry it through a more challenging phase for European carmakers. The German carmaker, majority-owned by Europe’s top carmaker Volkswagen, is targeting an operating return on sales in the range of 15-17% in 2024, below the 17.4% average analyst forecast in an LSEG poll and down from 18% in 2023.
Shares in the group, which was carved out and separately listed in a mega-IPO in 2022, were up 0.5% with traders pointing to fourth-quarter results that were slightly ahead of estimates. However, as per Citi analysts, “Porsche will focus on brand and pricing in future, but to do this, the product range needed to be renewed. This is now happening – but the full impact on pricing and profitability will take time, and now come from a lower base.”
Porsche’s muted outlook for this year is a reflection of what parent Volkswagen said, which earlier this month said sales growth would slow in 2024 due to headwinds including from weaker economic growth, stiffer competition and higher costs. Porsche maintained its medium-term margin outlook of 17%-19%. In the long-term, it continues to expect more than 20%.
The German company’s shares are down nearly 1% year-to-date, underperforming a 10% increase in the STOXX Europe 600 Automobiles & Parts index with analysts pointing to fierce competition in China and expected ramp-up costs for the new model launches. Porsche is planning to launch the Panamera, Macan, Taycan and 911 model lines this year, which it said would be the biggest year of product launches in the company’s history.
In a separate development, shares in rival Ferrari are up about a quarter over the same period. Porsche posted sales of 40.5 billion euros for 2023, largely in line with an LSEG estimate, while the return on sales beat expectations for an operating margin of 17.7%.
