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Soaring to new heights

James Kon

Porsche AG, the German luxury car maker, continues to soar to new heights after achieving all-time high in both sales revenue and operating profit.

Sales in 2021 were reported at EUR33.1 billion which is EUR4.4 billion more than the previous year, representing a growth of 15 per cent (previous year: EUR28.7 billion), while operating profit was EUR5.3 billion, exceeding the previous year’s figure by EUR1.1 billion (plus 27 per cent). Porsche thus generated an operating return on sales of 16 per cent (previous year at 14.6 per cent).

In addition, Porsche is setting a high ambition for 2030 of more than 80 per cent all-electric new vehicles.

The latest achievement by the Stuttgart-based sports car manufacturer was shared by Chairman of the Executive Board of Porsche AG Oliver Blume during an annual media conference.

“Our positive business result is based on courageous, innovative and forward-looking decisions,” said Blume. “Our industry is experiencing what is probably the greatest transformation in its history. We set a strategic course early on and are robust on the operational front. This success is teamwork.”

Deputy Chairman of the Executive Board and member of the Executive Board for Finance and IT Lutz Meschke sees the basis for the strong figures in Porsche AG’s healthy cost structure in addition to the attractive product range.

Chairman of the Executive Board of Porsche AG Oliver Blume and Deputy Chairman of the Executive Board and member of the Executive Board for Finance and IT Lutz Meschke pose with the 911 Targa 4 GTS during the media conference. PHOTO: PORSCHE AG
Oliver Blume and Lutz Meschke at the conference

“Our business figures reflect the excellent earning power of our company. They demonstrate our value-creating growth and the robustness of our successful business model – even under difficult conditions such as the semiconductor shortage.”

Net cash flow grew by EUR1.5 billion to EUR3.7 billion in 2021 (previous year at EUR2.2 billion). As Meschke explained, “This indicator also provides impressive proof: Porsche is excellently positioned. The positive development is also based on the ambitious 2025 profitability programme, designed to sustainably support earnings through new innovations and business models.”

He thanked the company’s highly motivated employees for the success of its profitability programme.

“Porsche has further increased its efficiency and lowered the break-even point. This gives us the leeway to invest in the future viability of our company despite the tense economic situation. We are resolutely driving forward investments in electrification, digitalisation and sustainability. I am optimistic that Porsche will emerge from the current global crises stronger,” said Meschke.

Meanwhile, Blume said the tense world situation calls for humility and caution, adding that “Porsche is looking at the Ukraine conflict with great concern and dismay”.

“We continue to hope for a cessation of hostilities and a return to diplomacy. The safety and integrity of the people are paramount.”

To help people in need in Ukraine, he revealed that Porsche AG has donated EUR1 million.

“Experts are continuously determining the degree of impact on Porsche’s business activities in a task force. The supply chains for Porsche plants have been affected, which means that on-schedule production is no longer possible in some cases,” he said.

“We have challenging months ahead of us, both economically and politically, but we are nevertheless sticking to our strategic goal, which has been firmly anchored for years, of ensuring an operating return on sales of at least 15 per cent in the long term.”

Meschke added that the task force has taken initial measures to safeguard the company’s earnings in ensuring that they can continue to meet high earning targets. However he cautioned that the success of external challenges cannot be easily influenced.

Internally, Porsche has created all the conditions for a successful business model.

“Strategically, operationally and financially, Porsche is in an excellent position. We are looking to the future with confidence – and welcome the consideration of an IPO of Porsche AG, which would allow Porsche to raise its profile and increase its entrepreneurial freedom.

“At the same time, Volkswagen and Porsche could continue to benefit from joint synergies in the future,” Meschke said.

In 2021, Porsche delivered 301,915 vehicles to customers worldwide, exceeding the 300,000 mark for the first time in the company’s history (previous year: 272,162 deliveries).

The bestselling models were the Macan (88,362) and the Cayenne (83,071). Delivery figures for the Taycan more than doubled: 41,296 customers took delivery of the first all-electric Porsche.

The figures even overtook the iconic 911 sports car, although the famous model also set a new record with 38,464 units sold.

Blume said, “The Taycan is 100 per cent a Porsche and inspires all kinds of people – existing and new customers, experts and the trade media. We are stepping up our electric offensive with another model. By the middle of the decade, we want to offer our mid-engine 718 sports car exclusively in an all-electric form.”

Last year, almost 40 per cent of all new Porsche vehicles delivered in Europe were already at least partly electric, that is, plug-in hybrids or fully electric models.

In addition, Porsche had announced its intention to be carbon-neutral on the balance sheet in 2030.

“In 2025, half of all new Porsche sales are expected to come from the sale of electric vehicles, that is, all-electric or plug-in hybrid,” said Blume.

“In 2030, the share of all new vehicles with an all-electric drive should be more than 80 per cent. To achieve these ambitious goals, Porsche is investing in premium charging stations together with partners – and additionally in its own charging infrastructure.

“Further extensive investments are flowing into core technologies such as battery systems and module production. In the newly founded Cellforce Group, high-performance battery cells are being developed and produced that are expected to be ready for series production by 2024.”

In 2021, Porsche increased its deliveries in all global sales regions. Once again, the highest-volume individual market was China. With almost 96,000 deliveries, an increase of eight per cent was recorded in the country compared to 2020.

Porsche also grew rapidly in North America with a 22 per cent to more than 70,000 units delivered in the United States. A very positive development was also observed in Europe, in which the brand increased its new vehicle deliveries by nine per cent to almost 29,000 units in Germany alone.

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