Porsches global deliveries fell by 6% in the first half of the year, driven by a demand slump in China

German luxury sports car maker Porsche has reported a global sales drop in the first half of the year, citing the impact of stiff competition in China, according to a company statement on Tuesday.

Global deliveries fell by 6% compared to the same period in 2024, driven by a sharp 28% drop in the Asian country.

China has historically been a crucial market for Porsche. In 2022, it accounted for roughly 30% of the firm's global sales. However, in 2023 deliveries started to decline, forcing the car maker to start closing dealerships in the country.

Porsche attributed the latest drop to "the challenging market conditions" and "intense competition" in China.

Domestic brands like Xiaomi have started gaining market share by offering high-performance electric vehicles at competitive prices.

Chinese automakers have also drastically shortened vehicle development cycles, allowing them to launch new models faster than global competitors. Companies like BYD and Chery have cut development times to as little as 18 months, compared to 5.4 years for foreign brands, Reuters reported earlier this month.

The US and the EU have responded with tariffs aimed at protecting their automotive industries, alleging that China unfairly subsidizes its carmakers. However, according to Reuters, it is the Chinese manufacturers' development speed, rather than subsidies alone, that gives them a technological and cost advantage.

Germany, Porsche's home market, also recorded a 23% decline, while the broader European market saw an 8% drop.

Germany's economy shrank by 0.2% in 2024, following a 0.3% contraction in 2023. The downturn has been driven by high energy prices, elevated interest rates, a sluggish digital transformation, and a shortage of skilled labor, all of which have weighed on industries, including automotive manufacturing.

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In contrast, Porsche's sales in the United States rose 10% year-on-year. Anticipating a 25% import tariff on vehicles announced in March, the company accelerated shipments to beat the deadline, resulting in higher stock. North America, which includes the US and Canada, became Porsche's largest sales region in 2024.

The emerging markets category also posted a 10% increase, achieving a new all-time high, according to the company.

(RT.com)