Falling sales in China force Porsche to admit strategic errors and reassess its approach to the world’s largest auto market. Learn more!
Porsche is facing a significant challenge in China as sales have sharply declined and dealerships report substantial activity reductions. Former Porsche CEO Oliver Blume has openly admitted the company made strategic errors in the country.
China Market ‘Collapse’
In an interview with German newspaper Frankfurter Allgemeine Zeitung, Blume stated that the Chinese luxury car market has “collapsed by around 80%,” leading to Porsche failing to meet its sales targets and putting considerable pressure on its financial results. China has traditionally been one of Porsche’s three largest markets, alongside the US and Germany.
Overly Ambitious Growth Strategy
Blume believes an overly ambitious growth strategy backfired when actual demand didn’t meet expectations. Furthermore, Porsche’s product portfolio has been criticized for a lack of flexibility, particularly in powertrain options.
Macan EV Decision Under Scrutiny
A prime example is the new Porsche Macan. The company decided to transition the Macan entirely to an all-electric platform, eliminating internal combustion engine (ICE) and hybrid options for the future of the model.
The 58-year-old leader admits Porsche “was wrong” with this decision, although he emphasizes that, at the time the strategic choice was made, data suggested it was the right path.
Dealerships Feel the Impact
The bleak market situation is also reflected in a recent report from CarNewsChina, which shows many Porsche dealerships in China experiencing a clear decline in customer traffic and activity.
Vehicle deliveries are reportedly down 26% year-on-year, to around 32,200 units in the first three quarters of 2025, a significant drop from a peak of approximately 95,000 vehicles in 2021.
Staffing Adjustments
Dong’an Holdings, which operates Porsche’s dealership network in China, has stated that many employees at affected locations have been temporarily laid off, with no specific timeframe for a return to normal operations.
Future Outlook & ICE Vehicles
Looking ahead, Blume expresses confidence that vehicles using internal combustion engines, such as the Porsche 911, will still have a market for the next 10 to 15 years. This view is reinforced by discussions with policymakers in China.
Potential Local Production
The German CEO also mentioned the possibility of producing some Porsche models at Volkswagen’s plants in China. He stated that this option hasn’t been ruled out, but acknowledges the risks are substantial. Currently, most Porsche vehicles are produced at the company’s plants in Zuffenhausen and Leipzig (Germany), while the Cayenne is assembled in Slovakia.
Leadership Transition
Although stepping down as Porsche CEO, Oliver Blume will continue to head the Volkswagen Group. He will be succeeded by Michael Leiters, former CEO of McLaren, from January 1, 2026.
A Warning for the Industry
The crisis in China isn’t just a lesson for Porsche, but also serves as a clear warning to global luxury car manufacturers about the risks of rapid growth and overly quick transitions to electric vehicles in the face of volatile market demand.