Porsche has announced restructuring its dealership network in China, reducing the number of Porsche Centers from 138 to about 100 by the end of 2026. This move, described by the company as an “optimisation,” comes as the German luxury carmaker grapples with declining sales in what was once its most important market.
Sales figures for Porsche in China have been on a steady decline over the past two years. In 2023, the company reported a 15% drop in sales, with a total of 79,283 vehicles sold. The situation worsened in 2024, as sales plummeted by 29% in the first nine months of the year. Once regarded as Porsche’s largest market for eight consecutive years, accounting for more than 30% of its global sales, China has become a challenging landscape for the brand amid shifting market dynamics and intensifying competition.
Struggles in the Chinese Market
China’s evolving automotive market has presented significant challenges for foreign brands like Porsche. The rise of local electric vehicle (EV) manufacturers, coupled with a growing consumer preference for new energy vehicles (NEVs), including battery electric and plug-in hybrid models, has reshaped the industry. Meanwhile, an ongoing price war has put further pressure on luxury automakers, with reports suggesting that some Porsche models have seen discounts of up to 35% at dealerships.
These market forces have contributed to increasing difficulties for Porsche’s dealer network. Showrooms have struggled to move inventory, leading to dissatisfaction among dealers and prompting the need for structural changes.
Restructuring Strategy
Under its new plan, Porsche will concentrate its dealership presence in major metropolitan areas such as Shanghai and Beijing. The company intends to invest in the “Destination Porsche” concept, which transforms traditional dealerships into luxurious experiential hubs. These updated showrooms, currently implemented in 35% of Porsche Centers—up from 20% in 2022—aim to offer customers a more engaging and immersive brand experience.
Additionally, Porsche is expanding its digital presence to cater to a tech-savvy audience. A new feature, “Track Your Dream,” available on the Porsche app and WeChat Mini program, allows customers to monitor their vehicle’s production and delivery in real-time, enhancing the purchasing journey.
The Bigger Picture
Porsche’s challenges in China are emblematic of broader trends in the country’s automotive market. Imported vehicle sales have seen a sharp decline, falling by 14.3% year-on-year in the first ten months of 2024. Simultaneously, dealership closures have surged, with nearly 2,000 shutting their doors in the first half of this year alone—nearly matching the total closures for all of 2023. Over the past four years, approximately 8,000 dealerships have ceased operations across the country.
As Porsche recalibrates its strategy, it doubles down on its electrification goals. The company aims to make 80% of its global sales electric by 2030. However, competing with domestic EV giants in China, where the shift to new energy vehicles has been swift and widespread, remains a formidable challenge.
Porsche’s Legacy in China
China has long been a key market for Porsche. In 2009, the brand made a bold statement by unveiling its Panamera sedan in Shanghai, signalling its commitment to the market. The success of models like the Cayenne and Macan SUVs further solidified Porsche’s position among Chinese consumers. However, the rapidly changing market landscape has forced the company to rethink its approach.
While the dealer network optimization may cause temporary disruptions, Porsche’s investment in digital tools, luxury showrooms, and electrification suggests a clear strategy to adapt to the demands of the modern Chinese consumer. The coming years will determine whether these efforts will be enough to restore Porsche’s position in a market that once seemed unassailable.
