Porsche confirms outlook but warns luxury not immune to economic woes
By Victoria Waldersee
BERLIN (Reuters) — Porsche AG reported nine-month results in line with its annual forecast on Wednesday but warned the luxury sector was suffering like others from higher costs and dampened consumer confidence as interest rates rise.
The luxury carmaker's supply chain was improving with inventories down, but high inflation combined with peak investments for a line of new products to launch in 2024 meant its costs were still high, Chief Financial Officer Lutz Meschke said.
«Governments increased interest rates heavily… that creates a situation where customers are quite reluctant (to invest in) a new product,» Meschke said.
Tesla (NASDAQ:TSLA) CEO Elon Musk also said last week he was worried that higher borrowing costs would prevent potential customers from affording its vehicles despite substantial price cuts, and other major carmakers have similarly become more cautious.
Rising inflation and economic uncertainty have curbed shoppers' appetite for luxury after years of blockbuster demand, hurting quarterly sales of major luxury brands like LVMH and Gucci-owner Kering (EPA:PRTP).
«We are suffering in the entire economy,» said Meschke. «It is also hitting the luxury industry — you can follow it when it comes to share price development of all luxury retailers worldwide.»
Porsche will launch a new Panamera, Taycan and e-Macan and a new sports car generation in the coming year, and spent 2 billion euros ($2.12 billion) this year on research and development, the highest in a nine-month period in the company's history.
Like other carmakers, it also faced a difficult market in China, with deliveries down 12% this year so far.
Executives were in the country last week to discuss strategy with dealers,
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