Porsche Says It Must Look Beyond Cars To Remain Profitable

Porsche says it will need to do more than build cars moving forward in an age of new mobility.

During a recent interview with Autocar, Porsche finance and IT boss Lutz Meschke said that in the future, Porsche customers may buy fewer vehicles and the manufacturer will be forced to explore other business models to make up for these potential losses.

“Cities want to reduce traffic, therefore we have to look for solutions which fit our brand. Shared mobility is not enough – it will not bring us significant profit share,” Meschke said. “If you want to get a piece of the cake, you have to think about investments in other brands or in traffic solutions. Just to talk about Porsche cars to get the right fit for future mobility, that’s not enough. We must think about investments, start-ups, to get profitability in other businesses.”

“Today our customers are willing to buy two, three, four Porsches, but in future, maybe they will buy one or two and for mobility in cities, they will use other services. We have to think about business models that can balance these potential losses,” he added.

Also Read: Porsche Expanding Its Subscription Service Across The U.S. And Canada

One new field that Porsche recently entered is the world of vehicle subscription programs. The German sports car manufacturer currently operates its subscription service exclusively in a handful of North American cities and plans on growing it into Asia and Europe over the next two years.

According to Meschke, however, a subscription service alone won’t make up for the potential sales Porsche will lose as more people live in cities and have less need for a car of their own.

“If 60% of people will live in major cities, then car sales in those cities will be reduced significantly. With our brand, we are limited. It will be a niche and we will not earn enough money to keep the profitability level at 15% (Porsche’s margin aim) and that’s the problem. We must think about new business models, not only with our own brand but with investments.”

Meschke added that there will be a time when the majority of Porsche’s revenue won’t come from selling cars. He stopped short of providing a date for when this will happen.