Porsche is losing in China

Porsche’s grip on the Chinese luxury car market is slipping. Once the automaker’s largest market for eight consecutive years, China has seen a dramatic decline in Porsche sales, down 29% in the first nine months of 2024. The drop has forced the German carmaker to announce plans to close nearly 30% of its dealerships in the country by the end of 2026.

Porsche, which currently operates 138 dealerships, will reduce that number to approximately 100 by the end of 2026 as it seeks to consolidate operations and focus on profitability. Key markets like Beijing and Shanghai will see renewed investment, while underperforming regions will be phased out, the company said in a call with investors.

Porsche’s big pivot in China

The challenges Porsche faces are emblematic of a broader shift in Chinese consumer preferences. Locally produced electric vehicles (EVs) and homegrown brands are on the rise, undercutting European luxury automakers in both price and technology. Despite declining sales, Porsche remains optimistic about its long-term potential in China.

2025 Porsche 911 GT3

Porsche

Alexander Pollich, head of Porsche China, emphasized the importance of profitability and a premium customer experience. “Our key purpose out of optimization is to improve the overall network profitability, resulting in a multi-win situation,” Pollich said during an investor call.

Porsche plans to introduce advanced connected technologies for its remaining dealerships. Enhancements include real-time production and delivery tracking via the Porsche app and WeChat, as well as a new technical division aimed at catering to China’s tech-savvy buyers.

Competition heats up for European automakers

Porsche’s decline highlights a growing challenge for European automakers in China. As local brands like BYD and Nio continue to gain market share, premium European names face mounting pressure to innovate while maintaining their luxury appeal. For Porsche, the stakes are high as its Chinese market performance in 2024 has already lagged far behind previous years.

Porsche Taycan GTS and GTS Sport Turismo

Porsche

In 2021, the brand sold over 95,000 vehicles in China, surpassing sales across Europe and the U.S., which reported annual sales of 86,160 and 70,025, respectively. In 2022, the automaker saw a slight sales decline in China—about 2%—but still surpassed the sales of Europe and the U.S.

By 2023, that marginal drop turned into a sharp decline, with reported sales of 79,283 in China. That trend has only been reinforced so far this year. In the first nine months of 2024, Porsche saw a nearly 30% drop in sales across China.

Final thoughts

Despite the setbacks, Porsche remains confident in its brand values of sportiness and performance. By streamlining operations and adapting to China’s evolving market dynamics, it hopes to reclaim some of its lost ground. Whether these efforts will be enough to combat rising competition remains to be seen, but the luxury automaker is betting on its ability to adapt to the world’s largest car market.