Archive · 22 Sep 2026
Porsche's Decline Clouds Volkswagen's Recovery Amid German Auto Crisis
Porsche used to be one of Volkswagen’s strongest money-makers.
Now Porsche is selling fewer cars in China and is dealing with pressure from United States tariffs.
Volkswagen said Porsche’s expected value had fallen and recorded a €6 billion write-down.
This warning came soon after Volkswagen announced major job cuts.
Thousands of workers protested against cuts at German plants.
Porsche says it still aims for profit margins between 10% and 15%.
Analysts doubt that reducing costs alone will solve Volkswagen’s problems.
They also say Skoda has become more profitable than Porsche within the group.
Volkswagen is trying to recover while facing competition from Chinese carmakers and wider pressure on Germany’s auto industry.
Volkswagen issued a profit warning tied to a €6 billion write-down on its 75% Porsche stake.
Porsche has lost ground in China and faces pressure from tariffs affecting its United States business.
The write-down reduced Porsche’s goodwill to about €10 billion, down from €18.8 billion in 2022.
Porsche CEO Michael Leiters maintained the company’s medium-term margin target of 10% to 15%.
Analysts say cost cuts may not be enough as Volkswagen targets a 9% operating margin by decade’s end.
- Who
- Volkswagen, Porsche, CEO Oliver Blume, Porsche CEO Michael Leiters, workers, unions and auto industry analysts.
- What
- Volkswagen issued a profit warning and recorded a €6 billion write-down on its Porsche stake amid broader restructuring difficulties.
- When
- The warning was issued on Friday, while worker protests took place on Monday; Porsche’s listing occurred in 2022.
- Where
- The crisis affects Volkswagen operations in Germany, China and the United States.
- Why
- Porsche’s financial expectations weakened because of declining Chinese sales, electric-vehicle transition missteps and pressure from United States tariffs, worsening Volkswagen’s broader recovery efforts.
Analysts and Investors
Company Leadership
Whether restructuring is sufficient
Analysts and Investors
Investors and analysts describe Volkswagen’s situation as fragile and say cost-cutting alone may not resolve the crisis.
Company Leadership
Volkswagen is pursuing major restructuring and job cuts, while management continues to defend its recovery plans.
Porsche’s future profitability
Analysts and Investors
Analysts say Porsche is becoming smaller, its margins have fallen, and it may no longer be a major profit driver for Volkswagen.
Company Leadership
Porsche CEO Michael Leiters says the company remains committed to its medium-term margin target of 10% to 15% and a focus on high-end models.
Role of deeper cuts
Analysts and Investors
Critics argue that Volkswagen also needs stronger sales and strategic improvements, not just lower costs.
Company Leadership
Bernstein analysts said Porsche’s sharp earnings decline could support Oliver Blume’s push for even deeper cuts.
- Write-down
- €6 billion on Volkswagen’s 75% stake in Porsche
- Porsche goodwill
- About €10 billion after the latest write-down, compared with €18.8 billion in 2022
- Porsche margin target
- 10% to 15% medium-term target
- Volkswagen margin target
- 9% operating margin by the end of the decade
- Current Volkswagen margin
- Expected to be 1% at best this year
- Porsche ownership
- Volkswagen owns 75% of Porsche
- Worker protests
- Thousands of workers protested against cuts at German car plants