Filed under: International markets, Earnings reports, Forecasts, Deals, Consumer experience, Competitive strategy
Despite a tumbling economy where recession fears gain ground each day, car demand is rising for at least one auto maker. It looks like even in a recession people continue to need cars, and the good times are rolling for carmaker Porsche SE which reported that its first-half profit rose 44%. For this period, the sports vehicle maker counted strong sales for its Cayenne sport-utility vehicles.
Porsche’s profit climbed to 1.3 billion euros ($1.97 billion), compared with 897 million euros in the same period last year. A stake increase in Europe’s biggest carmaker Volkswagen over the past two years made Porsche post a strong gain in its earnings numbers during the six months ended January 31.
Taking a look at the company’s first-half revenue, we see a growth of 14% to 3.49 billion euros as Cayenne’s first-half sales doubled to 20,340 SUVs, despite surging gasoline prices. The increase in Cayenne sales resulted in a 19% gain in overall deliveries. Thus, first half deliveries climbed up to 46,600 cars. The strong gains in Cayenne sales offset lower demand for the popular Porsche 911, whose sales fell 5.6% to 16,360.
Looking ahead, Porsche expects an increase in its car sales, lifted by higher emerging markets demand. Currently, the sports-car maker is spending 1 billion euros to develop a new four-door sports sedan model called the Panamera. Sales of the Panamera are expected to come in at 20,000. The company is also developing a hybrid-powered version of the Cayenne.
Porsche announced yesterday that its holding company, Porsche Automobil Holding SE has approved an increase in its stake in Volkswagen AG from 31% to more than 50%. Porsche was already the largest shareholder in Volkswagen prior to yesterday’s announcement.
Making comments on the news, Martin Winterkorn, Volkswagen CEO, believes that Porsche’s move to hold a majority stake proves confidence in Europe’s biggest carmaker.
Eliza Popescu is a financial writer for the on the internet investment advisory service Investor’s Observer.
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