{"id":48814,"date":"2023-05-03T12:03:08","date_gmt":"2023-05-03T16:03:08","guid":{"rendered":"https:\/\/autosector.com\/?p=48814"},"modified":"2023-05-03T12:03:08","modified_gmt":"2023-05-03T16:03:08","slug":"porsche-profit-rises-on-stronger-sales-pricing-power","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=48814","title":{"rendered":"Porsche profit rises on stronger sales, pricing power – Autoblog"},"content":{"rendered":"

Porsche<\/a> AG\u2019s first-quarter earnings jumped as luxury carmakers continued to show gains despite a slowing global economy. \u00a0<\/p>\n

Operating profit rose to \u20ac1.84 billion ($2.03 billion) while revenue increased to \u20ac10.1 billion in the first quarter, the company said Wednesday. That\u2019s roughly 25% higher than last year, though it failed to impress investors watching for aggressive price increases. Porsche shares fell as much as 3.6%.<\/p>\n

High-end carmakers like Porsche, Mercedes-Benz<\/a> AG and BMW<\/a> AG have proven to be less exposed to softening global demand and inflation that is hitting consumers. Still, economic uncertainties are weighing on the industry.\u00a0<\/p>\n

Porsche plans to increase prices by 4% to 8% in the second half of the year for new models in the U.S. and Europe, Chief Financial Officer Lutz<\/a> Meschke said on a call with reporters. He added that the company expects the base prices for its electric vehicles<\/a> to be 10% to 15% higher than the corresponding internal combustion engine models.\u00a0<\/p>\n

\u201cThe expectation when it comes to the BEV transition is that we can achieve a very high price premium,\u201d Meschke said.<\/p>\n

Porsche, which reiterated its 2023 guidance that margins would stay in a range of 17% to 19%, said its return on carmaking was 18.2% in the first quarter.<\/p>\n

Automakers are still getting a boost from pent-up demand after supply-chain issues capped output, though uncertainty about global demand persists. Stellantis NV\u2019s first-quarter sales climbed more than expected thanks to strong vehicle prices and higher shipments of models like the Jeep Compass<\/a>.<\/p>\n

But pressure on carmakers remains, particularly following Tesla<\/a> Inc.\u2019s decision to cut prices on its EV lineup, a drag on mid-segment electric models. Yet, for luxury carmakers like Porsche, analysts are watching whether they can raise prices more to offset higher input costs.<\/p>\n

\u201cThey key thesis on Porsche is that they can push pricing in this environment,\u201d said Bernstein analyst Daniel Roeska. \u201cIf that\u2019s not happening, that\u2019s the worry.\u201d<\/p>\n

The maker of the 911 sports car<\/a>, which remains majority owned by parent Volkswagen<\/a> AG since last year\u2019s listing, is targeting a move further upmarket to battle Ferrari<\/a> NV. The German company is planning an all-electric high-performance SUV above its battery Cayenne<\/a>, slated for around 2026, as part of a plan to boost operating margins to more than 20%.<\/p>\n

Porsche\u2019s financial services unit was less immune from the impact of inflation and rising interest rates. In the first quarter, the division saw its operating profit fall to \u20ac86<\/a> million from \u20ac102 million on the valuation of interest rate hedges and derivatives, and said the share of leased<\/a> and financed new cars<\/a> declined to 42% from 46% last year.<\/p>\n

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