Porsche just admitted its profit margin collapsed to a stunning 1.1 percent last year, and the company’s answer is to start cutting. New CEO Michael Leiters used this week’s annual general meeting to lay out Strategy 2035, a sweeping turnaround plan built around one blunt idea: Porsche needs to chase profit, not sales volume. For a brand that has long printed money on reputation alone, a margin that thin is a flashing warning light.
Three Pillars, One Blunt Message
Leiters, who took the top job on January 1, says the company knows exactly what’s broken. The plan rests on three pillars with names that sound corporate and tidy: Brand and Customer, Products and Portfolio, and Company. The first pillar is the easiest to pitch: Porsche is doubling down on the things that built the badge in the first place — sports cars, driving engagement, performance, and exclusivity. Leiters was explicit that the company won’t chase volume just to move metal; the goal is for someone to buy a Porsche because they genuinely want one, not because it landed in a convenient lease deal.
There’s also a national-pride angle running through the strategy. Leiters talked about reinventing the meaning of “Made in Germany” and proving the brand all over again, framing it as the thing that ultimately decides whether the company succeeds. It’s a confident message, but it’s also an admission that the shine had started to wear off.
The Lineup Is Getting Cut Down
This part is what enthusiasts will want to read closely. Porsche reaffirmed its commitment to combustion, hybrid, and electric powertrains all at once, meaning it isn’t abandoning gas engines to go all-in on batteries. The 911 sits right at the center of that thinking — Leiters says there will be no fully electric 911, full stop. Instead, the icon lives on through the performance hybrid system that first appeared on the GTS and has since spread to the Turbo, which Leiters described as a crucial ingredient for keeping the car alive.
At the same time, Porsche is leaning hard on the Cayenne Electric, betting it can build real EV credibility for the brand. Notably absent from the announcement: any mention of the nearly finished electric Boxster and Cayman, a curious gap given how close those cars are to production.
The Cuts Go Deeper Than the Headlines
The third pillar points the knife at the company itself. Porsche is promising more platform sharing with the VW Group, more efficiency, and fewer layers of internal complexity. It’s also openly discussing workforce reductions and other cost-cutting measures — never a comfortable thing for a company to say out loud.
And that’s where it gets complicated. Leiters made clear that the streamlining already announced won’t be enough on its own, signaling a lot more belt-tightening is still coming. Supervisory Board Chairman Wolfgang Porsche backed him up, talking about discipline, clear priorities, and measures that will be highly noticeable and in some cases uncomfortable. When the people at the very top warn that cuts will hurt, they usually mean it.
Why This Matters for the People Who Love These Cars
A 1.1 percent margin at a company like Porsche isn’t a rounding error — it’s a wake-up call. This is a brand that has long been one of the most profitable names in the entire car business, and watching that profitability nearly vanish says something about how bloated and complicated the lineup had become. The turnaround is real, and so is the risk.
For enthusiasts, the trade-offs cut both ways. Killing variants and simplifying the range could mean a sharper, more focused Porsche that remembers it’s a sports car company first. It could also mean fewer choices and harder decisions about which beloved models survive. The promise to keep the 911 away from full electrification will please purists, but the heavy reliance on hybrids and the Cayenne Electric shows the company is still trying to thread a difficult needle.
The real question is whether buyers and investors give Porsche the patience this plan demands. Turnarounds take time, and Leiters is asking for plenty of it while warning the cuts will sting. If Strategy 2035 works, Porsche comes out leaner and truer to itself. If it doesn’t, a 1.1 percent margin could end up looking like the warning nobody acted on fast enough.