Porsche has significantly reduced its exposure to China as operating profit rebounded sharply in the first nine months of 2026, the company said in its third-quarter earnings announcement on Tuesday. Operating profit reached 1.74 billion euros, equivalent to $1.94 billion, compared with 40 million euros in the same period last year, which had been depressed by around 2.7 billion euros in strategic restructuring costs.
However, the German luxury carmaker's underlying business showed weakness elsewhere. Sales revenue fell 5.9% to 25.28 billion euros, while vehicle deliveries declined 16% to 178,532 units. North America remained Porsche's largest sales region by volume during the period.
The shift away from China reflects mounting challenges in the world's largest car market, where German luxury automakers have faced intensifying competition from domestic electric vehicle makers including BYD, Geely and Xiaomi. Porsche's China sales have fallen sharply in recent years as a result. Jochen Breckner, Porsche's chief financial officer, said that reducing China exposure means the company's business is now less dependent on developments in that market.
Porsche is cutting thousands of jobs as part of a broader restructuring aimed at reducing costs and responding to weaker demand. Citi analysts said the company's results were as expected despite challenging conditions. They noted that despite exceptionally low deliveries, higher costs and higher battery electric vehicle sales, Porsche's underlying operating profit remained resilient compared with German premium competitors.
The analysts said Porsche has outlined a plan to return to double-digit operating profit margins, with recovery expected to begin in 2028 and net cash flow expected to rebound to above its initial public offering levels by 2031. While 2027 is expected to remain difficult, Porsche's multi-year profit recovery starting in 2028 is well-supported and credible relative to many peers, the analysts added.
For investors in Porsche, the sharp profit rebound offers some reassurance about the company's underlying profitability despite near-term headwinds, though declining deliveries and falling revenue suggest the carmaker faces sustained pressure in key markets.