With Profits On The Rise, Porsche Plans To Release An Electric Luxury SUV

Porsche AG announced plans to launch an all-electric SUV as it reported its first annual earnings since parent Volkswagen AG took the sports-car maker public last year.

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Having a sharper, strategic focus on high-end automotive consumers is one of the cornerstones of Ford's plan to boost profitability through a sharper, strategic focus on the new luxury SUV that will be the cornerstone of the company's plan to boost profitability.

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While Porsche has always produced high-end vehicles, like the iconic 911 and its all-electric sedan, the Taycan, the company is seeking to follow rivals such as Ferrari NV, Mercedes-Benz Group AG, and Aston Martin Lagonda Global Holdings PLC in targeting the growing ranks of world's wealthiest consumers, similar to Ferrari NV, Mercedes-Benz Group AG, and Aston Martin Lagonda Global Holdings PLC.

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Porsche Chief Executive Officer Oliver Blume stressed the importance of underlining and strengthening Porsche's sporty luxury positioning. “It is apparent that there are growing profit pools in this segment, especially in China and the United States.” 

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According to Mr. Blume, who is also the CEO of Volkswagen, the new Porsche SUV will be placed in the upper luxury segment, above the current top SUV for the company, the Cayenne. There are currently tests and development going on on the vehicle, but it has not yet been announced, and Mr. Blume did not give any indication of when it will go on sale. 

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Mr. Blume did add however that the design of the new all-electric SUV will feature Porsche's typical curving front-to-rear fly line, delivering a strong electric performance, and the vehicle will have a range of fully automated functions. Porsche's own performance electric vehicle technology will be used in the development of the SUV.

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Among the first high-end sports car makers to venture into the growing SUV market was Porsche, which launched the Cayenne in 2002 as a high-end model for the growing SUV market. It is believed that the success of the Cayenne and its smaller cousin, the Macan, launched in 2014, inspired other luxury car manufacturers to develop their own luxury SUVs, including Bentley and Lamborghini, as a result of the success of the Cayenne. 

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After a delay caused by issues with VW's software, an all-electric version of the Macan is due to be launched next year after a delay caused by problems with that company's software. VW holds 75% of Porsche, which means it is expected to launch an all-electric version of its 718 sports car next year, followed by the launch of a new generation of the company's Cayenne SUV in the coming years.

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Porsche has announced the launch of its new SUV as it reported its first annual earnings since listing on the stock market in September.

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According to Porsche, the company sold 309,884 vehicles last year, an increase of 2.6% from the previous year. In its annual report, Porsche stated that China and the United States were its biggest markets, accounting for 30% and 26% of sales, respectively. 

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In 2022, the company plans to increase its return on sales, which was 16% the year before, to 18% as opposed to 16% in 2021. Having said that, Porsche is targeting a rise to 20% in the coming years, which it hopes to achieve by moving upmarket in the process.

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From €33.14 billion in 2021, sales rose to 37.63 billion euros, or about $40.04 billion. The net profit rose by 68% to €6.9 billion.

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For the year, Porsche proposed a dividend of €1 per ordinary share and €1.01 per preferred share.

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In 2023, Porsche expects to realize an operating return on sales of 17-19%, with sales rising to around €40 billion to €42 billion as a result.

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Analysts' expectations were not met as Porsche shares traded 4% lower in Frankfurt.

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“While the results for the quarter fell slightly short of the consensus across the board, the guidance for 2023 appeared to be in line with expectations,” Daniel Roeska, an automotive analyst at Bernstein Research, wrote in a note to clients.