German luxury carmaker Porsche expects its profitability to decrease in 2024 as it focuses on launching four new models. The company revealed this information on Tuesday while posting full-year results that were largely in line with expectations, despite market volatility. The company, which is majority-owned by Volkswagen, aims to achieve an operating return on sales in the range of 15-17% in 2024, after reaching 18% in 2023.
Porsche’s finance chief, Lutz Meschke, stated in a recent press release, “In the medium term, we are sticking to our forecast of an operating return on sales of around 17% to 19%, and in the long run, we are aiming for a group operating return on sales of more than 20%.” Porsche’s shares, listed on the Frankfurt Stock Exchange, were expected to open 3.2% lower. The automaker’s shares have risen by 1.8% year-to-date, underperforming the 10% increase in the STOXX Europe 600 Automobiles & Parts index (.SXAP).
This is due to fierce competition in China and the expected ramp-up costs for the new model launches this year. Meanwhile, shares in Porsche’s rival, Ferrari (RACE.MI), have increased by about a quarter over the same period.
Earlier this month, Porsche’s parent company Volkswagen said that sales growth would slow in 2024 due to numerous headwinds, including weaker economic growth, stiffer competition, and higher costs. In 2023, Porsche achieved sales of 40.5 billion euros, largely in line with an LSEG estimate. The return on sales beat expectations with an operating margin of 17.7%. Porsche is planning the biggest year of product launches in the company’s history with four new launches in its Panamera, Macan, Taycan, and 911 model lines planned for 2024