Porsche, Germany's largest automaker, faces declining profitability due to waning demand for luxury vehicles in China, particularly its Porsche Taycan. This has led to substantial price reductions and concerns about the company's financial stability.
Germany's largest automaker has recorded sliding profitability, with its China unit under pressure as demand for luxury automobiles wanes. Specifically, demand for its Porsche Taycan has run out of juice, leading to significant markdowns. Bloomberg Intelligence's Joel Levington published a note on Monday highlighting the bleak demand story for the Porsche Taycan, which has forced the struggling German automaker to offer markdowns of $22,500.
Additionally, the vehicle's used value plummeted in 2024, while data from iSeeCars research finds the Taycan the most expensive alternative fuel vehicle to drive on miles used per year. More from Levington's report: Porsche Taycan $22,500 Markdown, Yet It's the Most Expensive EV Porsche is offering a $15,000 match on top of $7,500 in lease incentives to clear out 2024 Taycan models, yet iSeeCars research finds the model the most expensive alternative fuel vehicle to drive based on miles used per year. Porsche's increased use of discounting and rapid deterioration in its core China market has slashed more than $30 billion from its market cap since April, and has reduced risk views below luxury rivals Ferrari, BMW and Mercedes for the first time since its IPO in 2022. China Swoon Accelerates Risk Porsche's one-year default risk has nearly tripled since cutting its revenue outlook last July, supporting our view of a strong, albeit weaker, risk profile. Porsche's default risk screens similar to low-A peers like Anheuser-Busch, Adidas and Reckitt Benckiser as well as higher-rated but more volatile issuer Alibaba. The outcome from Bloomberg's DRSK matches Credit Benchmark's view of the unrated company. Porsche screens as between Honda A3/A-/A and Mercedes A2/A/Au in our fundamental analysis utilizing Moody's global automotive methodolog
Porsche Luxury Cars Demand Slump Markdowns China Market Default Risk
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