Porsche in talks with dealers over China’s EV slow down

A Porsche Macan Turbo is displayed as people visit the 18th Beijing International Automotive Exhibition (Auto China) on April 25, 2024, Beijing, China. (Photo by Li Yueran/Anadolu via Getty Images)

Wilfried Eckl-Dorna and Linda Lew

Luxury carmaker Porsche is in talks with Chinese dealers to smooth out relations as weaker sales of electric vehicles force the auto industry to rethink the transition away from combustion-engine cars.

The German carmaker is discussing with its Chinese retailers how to adapt their business strategies and customer service to market changes, according to a statement. Porsche didn’t provide details on a new direction, but said both sides plan to work more closely together.

Porsche and other western carmakers have seen their share of China’s EV market dwindle as local competitors increased their offerings and gained a bigger foothold.

With China’s economy bogged down by a real-estate crisis, overall demand for EVs has weakened, prompting price cuts that have eaten into the bottom line for manufacturers and dealers. Chinese media reported some Porsche dealers in China are now asking for compensation for selling EVs at a loss, and have also objected to this year’s sales targets.

Last year, China accounted for roughly a quarter of Porsche’s overall deliveries.

Porsche’s deliveries in the China market fell 15pc in 2023 and the sales continued to suffer this year, with the brand posting a 24pc decline in the first quarter. Deliveries to North America fell 23pc in the same period but mainly due to a customs-related delay in shipping.

Tension between Chinese distributors and German carmakers isn’t unprecedented. Volkswagen AG’s Audi brand resolved a dispute with its Chinese retailers in 2017 with undisclosed compensation payments.

In 2015, BMW paid $820m (€755m) to its retailers in China to help cover losses.