Porsche unveils new strategy Sportwagenschmiede '35 – new B-segment SUV and electric 718 due in 2028

Porsche has unveiled a new mid-term strategy called "Sportwagenschmiede '35" on 7 October, setting out how it plans to reshape its business and product range over the coming years.

The plan focuses on four areas: a tighter model line-up, a better balance between pricing and sales volumes, lower costs and a leaner organisation. The aim is to strengthen Porsche's position as a premium sports car brand while improving profitability.

Key strategy and financial targets

Dr. Michael Leiters, Chairman of the Executive Board of Porsche AG, said, "We are pursuing a clear plan with our strategy Sportwagenschmiede '35. The ultimate goal is to further strengthen our unique sports car brand – across all model lines and with new, highly desirable models in particularly high-margin segments."

A leaner organisation and more efficient processes are expected to lower Porsche's break-even point significantly. The company is targeting an annual sales threshold of less than 200,000 vehicles, based on an especially cautious outlook for the Chinese market.

Porsche's financial targets include:

Mid-term: An operating return on sales of 10% to 15%, a net cash flow margin of 9% to 12% for the automotive business, and Group revenue of €41 billion to €45 billion.

Long term: An operating return on sales of 15% and an automotive net cash flow margin of 12%.

Dividend policy: A payout ratio of at least 50% of consolidated net profit after tax.

Product plans

Porsche is also preparing a major expansion and reshaping of its model range, with several important new models due from 2028.

All-electric 718: The all-electric 718 Boxster and 718 Cayman will arrive first, with their first full year of production in 2028 expected to make a meaningful contribution to sales.

New B-segment SUV: Porsche will launch a new B-segment SUV in 2028, which will be sold alongside the existing all-electric Macan. It will be available with both ICE and PHEV powertrains. Once production ramps up, the new SUV is expected to make a significant contribution to sales and earnings from 2029.

Higher-end segments: Porsche plans to develop a mid-engined supercar positioned above the 911. It is also planning a more emotionally focused 911 derivative for the D segment and is considering a D-segment SUV positioned above the Cayenne.

Fewer derivatives: Porsche plans to cut the number of model derivatives by around 20%. The company expects average sales per model to rise by around 30% in the medium term. At the same time, it will continue to develop three types of powertrain: internal combustion engines, plug-in hybrids and next-generation battery technology.

Brand and customers

Porsche is sticking to its "Value over Volume" strategy. More extensive personalisation options are expected to help lift the average selling price of its top-end models by around 20% in the medium term.

Sonderwunsch: Porsche plans to expand its bespoke personalisation business, with revenue from the programme targeted to reach six times its current level in the medium term.

Three business areas: Porsche will organise its future activities around the "Home of Sports Cars" concept, covering three areas: Performance, including plans to increase its stake in Manthey Racing GmbH to 67%; Exclusivity, covering Sonderwunsch and Exclusive Manufaktur; and Heritage.

Operations and the Future Package

Porsche has also agreed a Future Package with employee representatives as part of its efforts to make the business more resilient.

The company plans to cut 9,000 jobs, while committing to protect its core workforce through to 2035. Other measures include the sale of Porsche's stakes in Rimac and Bugatti Rimac.

Management and staffing: Management positions will be cut by 40% in the medium term, and headcount in direct and indirect functions will be reduced by 25% to 30%.

Cost savings: Porsche aims to cut production labour costs by up to 30% and sales and distribution costs by 20% in the medium term. A separate materials cost programme is expected to reduce material costs per vehicle for new projects by around 10%.

R&D: Porsche Engineering and Porsche Digital will be merged to form Porsche Technologies, with the aim of bringing the company's engineering and digital development activities under one roof while reducing costs.

The Sportwagenschmiede '35 strategy represents a significant change in the way Porsche plans to run its business, with the company looking to become leaner and more profitable while continuing to invest in sports cars, new technology and electrification.