Porsche, the investment firm that controls Volkswagen, urged the German carmaker to fundamentally overhaul its business model on Wednesday as VW’s struggles dragged down its first-quarter adjusted profit.
The Stuttgart-based holding company posted adjusted profit after tax of €382m (about R7.4bn) for the January-March period, a 21% drop compared with last year’s period.
Volkswagen’s business model “needs to be fundamentally realigned to match the new market conditions”, Hans Dieter Poetsch, chairperson of Porsche’s management board, said in a statement.
The call for change comes as VW battles declining margins and undergoes major restructuring.
Porsche’s group result after tax was a loss of €923m, weighed by a €1.3bn non-cash writedown on its Volkswagen stake.
The holding company of Germany’s Porsche-Piech auto dynasty is Volkswagen’s largest investor, with 31.9% of shares and 53.3% of voting rights. It also owns 12.5% of sports-car maker Porsche.
Poetsch has previously voiced Porsche’s commitment to Volkswagen as an anchor investor but pushed the group and its subsidiaries to find savings.
Volkswagen CEO Oliver Blume has vowed to ramp up cost-cutting further on top of 50,000 job cuts under way across the group, with under-used plants in Germany under the spotlight despite a 2024 deal with unions guaranteeing no plant closures this decade.
Reuters
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