Core Viewpoint - Porsche's financial performance has drastically declined, with a 99% drop in operating profit for the first three quarters of the year, attributed to strategic restructuring costs, challenges in the luxury car market in China, and increased import tariffs in the U.S. [1][3] Financial Performance - For the first three quarters of the year, Porsche reported revenue of €26.86 billion, a 6% year-on-year decline [3] - Operating profit fell to €40 million, down from €4.035 billion in the same period last year, resulting in a sales return rate of 0.2%, compared to 14.1% last year [3][4] - The company faced approximately €2.7 billion in additional costs due to restructuring measures [4] Market Challenges - Porsche's sales volume decreased by 6% to 212,500 units, with significant declines in key markets: a 26% drop in China (32,000 units) and a 16% drop in Germany (22,500 units) [3][4] - Other luxury car manufacturers, such as Mercedes-Benz and BMW, are also experiencing sales declines and have announced cost-cutting measures [5] Strategic Adjustments - Porsche plans to expand its internal combustion engine and plug-in hybrid model lineup, delaying the launch of some electric models and restructuring its electric vehicle development strategy [7] - The company is also increasing prices in the U.S. market to offset tariff impacts, which have added €300 million in costs in the first nine months of the year [8] Organizational Changes - Porsche is initiating a structural reduction, planning to cut approximately 1,900 jobs at its Stuttgart headquarters by 2029, alongside the expiration of contracts for 2,000 temporary employees [4] - A leadership change is set to occur, with the current CEO stepping down at the end of the year, and a new CEO taking over in January 2026 [8] Future Outlook - Porsche aims to improve its profitability starting in 2026 after a projected bottoming out in 2025, with a target sales return rate of up to 2% [8] - The company emphasizes the importance of long-term resilience and profitability despite short-term financial challenges [9]

Core Insights - Ferrari's profits increased in Q2 due to strong demand for luxury models, offsetting additional tariff costs [1] - Total revenue grew by 4% year-over-year to €1.79 billion (approximately $2 billion), slightly below Wall Street's expectation of €1.83 billion [1] - The company expressed increased confidence in its annual performance guidance after recent US-EU trade agreements reduced previously threatened tariffs [1] Group 1: Financial Performance - Operating profit rose by 6% to €709 million [1] - Ferrari's stock price fell by 4.8% in Milan due to slightly disappointing overall revenue, despite a year-to-date increase of 1.5% [1] - The company avoided the significant performance declines faced by competitors like Porsche, which lowered its performance guidance due to the trade war [1] Group 2: Market Dynamics - The US is Ferrari's largest luxury car market, accounting for about one-quarter of its deliveries [2] - Ferrari's vehicles are all manufactured in Italy, limiting its ability to offset higher costs through production shifts [2] - The company plans to raise prices on some US models by up to 10% to address tariff impacts [2] Group 3: Competitive Landscape - Lamborghini reported record deliveries in the first half of the year, driven by strong demand for plug-in hybrid models, despite a 6% profit decline due to tariff pressures [3] - The luxury car market remains resilient, with wealthy customers showing strong demand for top-tier vehicles, regardless of broader luxury market slowdowns [3] - Ferrari's customers are primarily ultra-high-net-worth individuals, with a higher price acceptance compared to average luxury car buyers, allowing the company to act as a price maker [3] Group 4: Industry Challenges - Other European automakers like Volkswagen and Renault have faced significant profit declines due to tariff impacts, with Volkswagen's Q2 revenue down 3% to €80.8 billion and operating profit down 29% to €3.83 billion [3] - Volkswagen's costs increased by €1.3 billion (approximately $1.53 billion) due to US tariffs, leading to a lowered sales return forecast for 2025 [3]