The head of Porsche decided to cut 40% of management to save the company

Porsche CEO Michael Leiters presented the strategy of saving the company, writes Frankfurter Allgemeine Zeitung.

As part of the cost reduction, the manufacturer will reduce the number of management positions by 40%. The number of staff in the administrative and production departments will be reduced by about 25%.

At the same time, Leithers announced an increase in the share of the annual bonus for senior management, tied to the individual performance of each employee, from 10 to 30%. "We believe that differences in results should be more clearly and consistently reflected in the executive remuneration system," he explained. “We want to strengthen the link between individual contribution and long-term value for the company,” added the Porsche CEO.

In the coming years, the manufacturer intends to focus on the development of cars with internal combustion engines, and is also considering the development of three new non-electric models. In the medium term, this will increase EBIT from the current 7.8% to 10-15%. The long-term strategic goal is a profitability of 15%, he explained.

The share of cars with traditional engines or hybrid powertrains, including rechargeable hybrids, in total sales will still be about 67%, despite the decision to ban cars with internal combustion engines from 2035, explained Leiters. “In any case, we still have four to five years to make money on these cars,” he said. Last year, about 78% of Porsche cars sold were powered by an internal combustion engine.

The manufacturer intends to increase the average price by 20%. “It’s not just about raising prices, it’s about increasing customer value — and thus raising prices. I think this is very important, said the head of Porsche.

At the same time, Porsche reduces the number of options offered throughout the model range by 20%, which allows to increase the production volumes of the remaining models, improve scalability and reduce costs. The company expects to increase sales of individual modifications to 30%.

The manufacturer plans to further reduce the break-even threshold: in the future it should be achieved with sales of less than 200 thousand cars. Judging by the results of the first half of the year, this year Porsche sells from 230 thousand to 240 thousand cars.