Yahoo Finance Inflation is starting to hit the super-rich, warns Porsche
Porsche has said soaring borrowing costs and rising prices are starting to impact even its wealthy clients.
The German carmaker’s finance chief said drivers were more “reluctant” to buy its cars after “governments increased interest rates heavily”.
Lutz Meschke said: “It is also hitting the luxury industry – you can follow it when it comes to share price development of all luxury retailers worldwide.”
Kering, the French group behind brands including Gucci and Saint Laurent, this week said sales had fallen 13pc over the last three months. Meanwhile, LVMH, which owns brands including hand bag maker Louis Vuitton and champagne house Moet, has lost 25pc of its value since April.
Mr Meschke’s comments came as Porsche reported a 12pc drop in sales in China, which has in recent years grown as an important market for high-end car sales.
Mr Meschke said: “In 2024, we expect a challenging year due to the geopolitical situation and the economy in China.”
It marks a rapid reversal of fortunes for high-end carmakers. 2022 was a record year for manufacturers including Porsche, Bentley and Rolls-Royce.
Carmakers were able to wring higher prices from rich buyers who had benefited from the cheap money and government subsidies used to prop up economies during the pandemic.
In March, Mr Meschke said Porsche would implement “significant price increases” in a bid to capitalise on high demand
Since then, the price of the Porsche 718 sports car has risen from £47,700 to £51,800 and the four-door Macan SUV has climbed from £50,800 to £53,400.
The company said at the time it wanted to spend the profits on developing a new range of electric cars.
The slowdown in China hit Porsche’s shares, which fell 1.7pc to reach their lowest level so far this year.
In spite of the challenges, Porsche kept its target for its annual profit margin unchanged at as much as 19pc. It said 80pc of sales should be all-electric by 2030.
