BUSINESS

Porsche Refines China Strategy as Sales Halve in Shifting Auto Market

Published: Jan. 28, 2026 12:34 a.m. GMT+8

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A Porsche Center in Zhuhai, Guangdong province, on Dec. 20, 2025. Photo: VCG

Porsche AG’s sales in China slumped for the fourth straight year in 2025, tumbling to 42,000 units — less than half the 96,000 vehicles the German luxury carmaker delivered at its 2022 peak — as it struggles with what its China chief called a “perfect storm” of economic strain and intensified domestic competition.

Alexander Pollich, president and CEO of Porsche China, acknowledged the downtrend in a Jan. 26 interview, citing a seismic shift in Chinese consumer preferences. Buyers increasingly demand advanced digital features, areas where domestic brands — unburdened by legacy systems — are outpacing foreign rivals.

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Explore the story in 30 seconds

Porsche’s China sales dropped to 42,000 units in 2025, less than half the 2022 peak of 96,000, mainly due to economic strain and stronger local competition.
Chinese brands, like BYD, outpace foreign rivals with cheaper prices and superior digital features, causing luxury car sales to fall 28% in 2025 and Cayenne’s segment prices to drop over one-third.
Porsche is responding with R&D in smart tech and new hybrid/electric models, but will not produce locally or launch a secondary brand.

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Who’s Who

Porsche AG: Porsche AG faced a fourth consecutive year of declining sales in China, dropping to 42,000 units in 2025. This downturn is attributed to economic strains, intensified domestic competition, and evolving Chinese consumer preferences for advanced digital features. Porsche is adapting its strategy by investing in R&D, developing new infotainment systems with Chinese suppliers, and exploring diverse powertrain options, including hybrids, while maintaining its brand identity.

BYD Co.: BYD Co. is highlighted for its vertical integration, which provides cost advantages difficult for other brands to match. This capability has led to price reductions across various automotive categories, intensifying competition in the market.

Volkswagen Group: Volkswagen Group's CEO, Oliver Blume, has indicated that China's high-margin export model is "no longer viable." This suggests a need for the group to scale back its supply chains and dealer networks within China, signaling a strategic shift for the Volkswagen Group in the challenging Chinese automotive market.

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What Happened When

2022：: Porsche delivers 96,000 vehicles in China, reaching its peak sales volume in the country.

2022-2025：: Average sticker prices in China’s mid-size SUV segment, including Porsche Cayenne, plunge by more than one-third.

Before 2025：: Chinese domestic brands with strong digital integration and aggressive pricing increasingly outpace foreign rivals like Porsche.

2025：: Porsche’s sales in China slump for the fourth consecutive year, falling to 42,000 units.

2025：: Luxury car sales in China drop 28%.

2025：: Porsche sets up its first overseas R&D hub in China, focusing on digital and smart systems.

2025：: Porsche revises its China strategy, pivots from an all-electric-only approach, and plans new SUV models with various powertrains.

2025-01-26：: Alexander Pollich, president and CEO of Porsche China, discusses the declining sales trend and changing consumer preferences in an interview.

Mid-year 2025：: Chinese authorities lower the luxury vehicle consumption tax threshold to 900,000 yuan from 1.3 million yuan, affecting about 30% of Porsche’s lineup, resulting in a nearly 11% increase in consumer costs.