Add Porsche (P911.DE) to the list of luxury automakers taking share and making bigger profits in a post-pandemic world.
German luxury performance automaker Porsche reported another blowout performance in Q1. The automaker, which went public last fall after being floated by major shareholder Volkswagen and the Piech family, reported sales jumped 25.5% versus a year ago to €10.10 billion ($11.05 billion). Operating profit rose 25.4% to €1.87 ($2.07 billion), with operating return on sales (similar to operating margin) remained at 18.2%.
“The significant growth is due to a number of factors: higher Group sales, continued positive pricing and mix effects. We keep driving our strategy of modern luxury forward, in the interest of our customers,” said Porsche Deputy Chairman Lutz Meschke in a statement on Wednesday.
Added Porsche Chairman and CEO Oliver Blume: “We are stronger positioned than ever before. Our products are highly sought-after by customers around the world. Our business model is flexible and robust – even in a challenging market environment.”
Porsche reaffirmed its full year 2023 revenue target of a range between €40 to 42 billion ($44.25 to $46.46 billion). “In the long run, we are aiming for a Group operating return on sales of more than 20 per cent,” Meschke said.
Though net cash flow for the same period last year was impacted by “serious disruptions in the supply chain,” it appears that was not the case for Q1 of this year, where Porsche delivered 80,767 globally, a jump of 18%. North America and China experienced strong growth for Porsche, rising 30% and 21% respectively. In fact Porsche said it notched gains in every sales region.
Among the most popular models that experiences strong sales growth were the Macan SUV (+30%), the Cayenne SUV (+23%), and the iconic 911 sports car (+19%).
“The key thesis on Porsche is that they can push pricing in this environment,” said Daniel Roeska, an analyst at Bernstein Research based in London. “If that’s not happening, that’s the worry.”
Porsche’s strong numbers today follow on positive reports by British luxury automaker Aston Martin (AML.L) which reported revenue climbing 27% on higher volumes and pricing, and Mercedes (MBG.DE) which saw global results powered by its “top-end” models.
Bentley CEO Adrian Hallmark told Yahoo Finance in March that the British brand’s well-heeled clientele do not appear fazed by macroeconomic risks at the moment, and are purchasing higher-trim level cars and spending more on personalization.
Lamborghini CEO Stephan Winkelmann noted when the company debuted its newest supercar, the Revuelto, “Everybody was trying to put an order in” during the world premiere. “We have already the next couple of years of production covered with orders,” he said to Yahoo Finance.
As Bernstein’s Roeska observes, as long as the luxury brands can push pricing power, the good times will keep on rolling. That trend hasn’t seen the momentum stop thus far in the luxury auto market — and is even appearing in the luxury goods market for items like high end apparel in jewelry, with French luxury brand LVMH Moët Hennessy (MC.PA) hitting a $500 billion market cap in late May.