Porsche will cut a fifth of its model variants and wants parts for new cars to cost about 10% less than planned

Porsche is to cut the number of model variants it offers by about 20% and has set a target to bring the material cost of each new vehicle project down by about 10% against its previous plans. The Stuttgart carmaker set out both goals on Wednesday 7 October at a capital markets day at its Weissach development centre, where chief executive Michael Leiters presented a strategy running to 2035 under the name Sportwagenschmiede '35, roughly "sports car forge".

The plan is about building fewer cars and earning more on each one. Porsche wants to break even at fewer than 200,000 vehicles a year. Leiters said it should get there as early as 2027, according to the German broadcaster ARD's tagesschau. Porsche delivered 279,449 cars in 2025, Reuters reported.

Why Porsche is shrinking

Sales have fallen hard. Porsche delivered 122,306 cars in the first half of 2026, 16% fewer than a year earlier. Deliveries in China fell 32% to 14,501, and in North America, still its biggest region, they fell 13% to 37,712, the company said on 9 July. It blamed the end of production of the petrol 718 Boxster and Cayman, the expiry of US tax credits for electric and hybrid cars, and a weak Chinese market.

Profit had fallen further in 2025. Reuters put Porsche's 2025 group operating margin at 1.1%. It recovered to 7.8% in the first half of 2026, on revenue of €17.23 billion, down 5.1%. Porsche confirmed its medium-term target of a margin of 10% to 15%, on revenue of €41 billion to €45 billion, with 15% as the long-term aim.

Part of the hole was self-inflicted. Porsche slowed its move to electric cars and went back to combustion and hybrid models, a change of course that Reuters said had cost Porsche and its parent, Volkswagen, nearly €7 billion.

What changes for the parts it buys

The variant cut is the part suppliers will feel first. Porsche says that with about 20% fewer versions, sales per variant should rise by about 30% in the medium term. In practice that means fewer part numbers, with higher volumes on each.

The material cost programme comes with it. Porsche says the 10% saving on new vehicle projects will come mainly from more common parts, from concentrating its own spending on the parts that make a Porsche feel like a Porsche, and from "synergies within the partner and group network". It will lean harder on two Volkswagen Group platforms it shares with Audi, the electric PPE and the combustion and hybrid PPC. More shared platforms and more common parts mean more sourcing decisions taken across the group rather than for Porsche alone.

Development is being squeezed as well. Porsche wants development costs for future model lines to fall by up to 20%, through shorter development times, more modular design and fewer variants. It is merging Porsche Engineering and Porsche Digital into one unit, Porsche Technologies. In production it wants personnel costs down by up to 30% in the medium term, and sees further savings from building different models on the same line.

There is also a quality target that will reach supplier quality teams. Porsche says a new quality initiative should cut warranty costs by up to 45% in the medium term.

Suppliers have already been through one round of this. In its half-year results on 29 July, Porsche said charges of about €400 million from its realignment had been largely offset by settlements with suppliers, which let it release about €300 million of provisions it had set aside in 2025 for the change in product strategy.

Which cars, and which engines

Porsche is keeping petrol, hybrid and electric drives, and says it is investing in combustion and plug-in hybrid powertrains as well as the next generation of battery technology. Porsche expects the mix to be about two-thirds combustion and one-third battery-electric into the 2030s, tagesschau reported. Porsche plans to close the development and production activities of Cellforce, its battery cell subsidiary, and of its eBike and Cetitec units.

The dated launches are the electric 718 Boxster and Cayman, which Porsche expects to help sales in their first full year of production in 2028, and a new B-segment SUV with combustion and plug-in hybrid engines, to be shown in 2028 and sold alongside the electric Macan. After that the weight shifts to larger, more expensive cars. Porsche plans a mid-engined super sports car platform for a model line above the 911, is looking at an SUV above the Cayenne, and wants to raise the average price of its top models by about 20%. It will preview the super sports car platform on 15 October.

The low-volume end is growing. Porsche wants its Sonderwunsch personalisation business to sell six times as much in the medium term, and is raising its stake in Manthey Racing, its performance partner at the Nürburgring, to 67% from 51%.

The jobs

Porsche will cut its workforce, in both direct and indirect roles, by 25% in the medium term, with a strategic target of 30%. Management positions will fall by 40%. Porsche employs about 42,000 people, according to tagesschau. Two rounds of agreements with the works council cover 9,000 job cuts by 2035, tagesschau reported. The latest, a "Future Package" agreed in July, added 5,000 of them and rules out compulsory redundancies until the end of 2035. In return Porsche has committed €2.1 billion of investment at the two sites by 2035.

The supplier base it buys from is shrinking too

Porsche's plan arrives as German and French parts makers cut capacity. On the same day, French supplier OPmobility said its plans would cut about 460 jobs in Germany and 310 in France, and was considering moving production from its exterior parts plant at Sterbfritz, in Hesse, to other German sites. It blamed a sharp fall in car production and less development work on combustion powertrains ahead of the EU's 2035 phase-out. Last month Bosch said it would cut 900 of the 1,700 jobs at its Nuremberg plant by 2029, Bavarian broadcaster BR reported. That plant's main product is high-pressure pumps for petrol direct injection.

That leaves a carmaker planning two-thirds combustion into the 2030s buying from a supply base that is taking combustion capacity out. For a supplier quoting Porsche today, the plan means fewer part numbers, longer runs on each, more parts shared with Audi, and a cost target about 10% below what Porsche's last plan allowed.

Sources: Porsche AG, "Porsche presents new strategy through to 2035", 7 October 2026; Porsche AG, "Executive Board and General Works Council of Porsche AG agree on Future Package", 27 July 2026; Porsche AG, half-year 2026 results, 29 July 2026; Porsche AG, first-half 2026 deliveries, 9 July 2026; Reuters, "Factbox: The key elements of Porsche's turnaround plan", 7 October 2026; tagesschau.de (ARD), "Porsche stellt umfassendes Sanierungsprogramm vor", 7 October 2026; OPmobility, press release, 7 October 2026; BR24, "Autozulieferer Bosch streicht 900 Stellen in Nürnberg", 28 September 2026; IG Metall Nürnberg, press release, 28 September 2026.