Porsche (P911.DE) on Monday issued its global 2022 results, with record revenues driving growth, especially in territories like the U.S. and China.
Porsche’s global revenue for 2022 hit a record $40.22 billion (37.6 billion euros), up 13.6% from a year ago, with operating profit jumping over 27% to $7.27 billion (6.8 billion euros). Overall deliveries of just under 310,000 vehicles and automotive net cash flow also set new records.
Results were driven by strong growth in the U.S, the U.K., and China despite sales dipping slightly there due to COVID-related lockdowns. But the focus for Porsche is still America.
“2022 was a milestone year for Porsche,” Porsche global CEO Oliver Blume said in a roundtable session with North America-based journalists. “In America the Porsche brand is stronger than ever.”
With its focus on crucial regions like the U.S., Porsche is leaning in hard on the luxury side of things for growth, noting that it was just named “the most valuable luxury brand in the world” by consulting firm Brand Finance. This thesis has lead investors to bid up Porsche shares, making it the most valuable European automaker.
This means Porsche will keep producing and evolving its high-end luxury/sports oriented SUVs like the Cayenne and Macan, which are popular in the U.S. and China. So while the Macan EV version is on the way for a 2024 release, so is a Cayenne EV too, coming in the back half of the decade.
And Porsche offered more details on an even-more exclusive EV SUV that’s on the way. This larger SUV will sit higher than the Cayenne in Porsche’s product portfolio, will feature the familiar Porsche “flyline” design, but be based on its SSP Sport platform for EVs.
“[The new] SUV which is bigger than the Cayenne…[is] very focused on the North American market and China,” Blume said on the call. Blume also said this new vehicle “won’t come at the end of the decade, but a bit earlier.”
Porsche aims to see its profits grow in the long-term, instituting a “Road to 20” program which would see its operating margin (return on sales) hit 20% in the long term. This means more luxury, special edition vehicles which will likely get the automaker higher margins.
And Porsche sports cars like the 911 are part of that strategy. Blume said the next-gen 911, which will be hybrid, is well on the development path, but Blume would not give timing on when the model will be revealed.
Blue did say that he’s driven the 911 hybrid and that “the punch is tremendous,” adding that the strength of the hybrid powertrain means the 911 “will have internal combustion engines as long as we can.” One thing to note however is that Blume said the 911 hybrid will not be a plug-in version, just a mild hybrid. This follows in the footsteps of hybrid sports cars like Acura’s NSX and the upcoming Corvette E-Ray.
Finally - despite the importance of the U.S. market, and huge incentives flowing from the Inflation Reduction Act (IRA) to build EVs and batteries in North America, Porsche will not be localizing production of its EVs in the U.S. like its German rivals BMW and Mercedes-Benz. Blume said Porsche is not considering production in the U.S. because Porsche is a “small volume” automaker and the brand “will never be about volume.”
If that’s the case, and Porsche wants to increase automotive margin as well as revenue without boosting volumes, perhaps the Road to 20 plan is really about raising prices, cutting costs, and selling more exclusive vehicles.