Leiters' Three-Phase Revival Strategy for Porsche

Six months into his tenure, Porsche CEO Michael Leiters has unveiled a decade-long recovery plan called Sportwagenschmiede 2035 (Sports Car Forge 2035). The road map unfolds in three phases: the first two years will focus on slashing costs and building financial resilience, followed by the launch of new products – starting with a combustion-engine counterpart to the electric Macan compact SUV – and then a wave of further novelties that are expected to lift revenue and profitability from 2028 or 2029 onward.

To underpin the plan, Porsche has agreed with its works council to cut an additional 5,000 jobs; together with an earlier programme the total reduction reaches nearly 9,000 positions. In return, the remaining workforce receives an employment guarantee through 2035 – a concession Leiters' predecessor had refused. The CEO insists the package is not just a headcount reduction but will deliver billions of euros in cumulative cost savings over ten years, giving Porsche the flexibility to invest in competitiveness.

On the product side, Leiters confirmed that Porsche will develop a new super-sports car above the 911 and a large SUV positioned above the Cayenne, with the latter targeting the American market where buyers demand ever-larger vehicles. The electric Cayenne has just gone on sale and is seeing strong order intake in Europe, while the struggling Taycan will not be discontinued but will see its variant count sharply reduced.

Leiters also addressed geopolitical challenges: Porsche will remain in China despite sales plunging from 90,000 to below 40,000 units, refusing to join a price war and betting on locally developed infotainment and hybrid models. In the United States, Trump-era tariffs are being partly offset by price increases, but a local factory remains off the table due to insufficient volume. Most forcefully, he called for urgent revision of EU CO₂ fleet targets, warning that the current trajectory risks “wealth erosion” for Europe’s industrial base and insisting on credits for low-carbon steel, aluminium and renewable fuels.

Why Porsche Is Adding a Combustion Macan Rival and Betting Big on the US

A Combustion Macan Counterpart Signals a Retreat from Pure-EV Dogma

Commitment to a combustion-engine model alongside the electric Macan is a telling pivot. The electric Macan was meant to spearhead Porsche's zero-emission ambitions, but the market has not moved as fast as regulators assumed. By developing a petrol-driven alternative, Leiters is effectively hedging against disappointing EV uptake, especially in regions where charging infrastructure and consumer sentiment lag. The move could also protect the Zuffenhausen and Leipzig plants from underutilisation, but it pushes the revenue contribution of the Macan line further into the future – not before 2028, by the CEO's own admission.

The Super-SUV Bet: Chasing American Margins

The plan to build an SUV above the Cayenne is a direct response to U.S. tastes for colossal vehicles, a segment where American luxury rivals and even Bentley have found rich margins. Because Porsche cannot afford a dedicated U.S. factory, the vehicle will likely be imported from Germany, making it highly exposed to tariffs. Leiters is banking on American buyers’ willingness to absorb higher prices, but the calculus is fragile: a further tariff escalation could destroy the business case.

Labour Deal Complicates the VW Group’s Cost-Cutting Push

The 2035 employment guarantee, granted after months of talks with the works council, puts Leiters at odds with the VW Group's own contentious cost-saving drive. VW brand managers fear IG Metall will now demand identical protections for VW workers. Leiters insists Porsche's situation is unique – volume-limited, manufacturing mostly in Germany – but the precedence is set, potentially hardening the union's stance across the group. The CEO's assertion that the package is “broadly supported” by the supervisory board suggests the VW family’s tacit blessing, but the tension will not dissipate easily.

Leiters' Regulatory Salvo Could Embolden Other Automakers

By citing the Salini report and demanding EU policy makers adopt more realistic CO₂ targets, Leiters is adding the weight of Porsche's brand to a growing chorus. His explicit call for credits for low-carbon materials and e-fuels, alongside a warning of industrial decline, could influence debates in the European Parliament and the Council of Ministers. If Porsche decouples its EU compliance strategy from a pure EV ramp-up, it may encourage other premium manufacturers to push for similar flexibility, potentially reshaping the next round of fleet regulations.

What Porsche's Board, Unions and Regulators Must Act On Now

  • Porsche's product development: Fast-track the combustion Macan counterpart to reach the market by 2028, as the company itself expects it to drive revenue growth then; any delay risks leaving the electric Macan alone in a softening EV segment.
  • US sales leadership: Begin pre-marketing the Cayenne-above SUV now, aligning dealer training and order-taking with the larger-vehicle preference Leiters identified; early pricing strategy must absorb current tariffs while preserving margins, because a local production hedge is ruled out.
  • China operations: Shift resources to the newly developed China-specific infotainment system and hybrid models to arrest the 50,000-unit annual sales decline; resist the price war as instructed but deepen local digital partnerships to differentiate.
  • VW Group management: Anticipate IG Metall will use Porsche's 2035 employment guarantee as a benchmark in ongoing VW brand negotiations; prepare counter-arguments based on Porsche's special volume and production constraints to avoid a group-wide precedent.
  • EU policy teams: Incorporate Leiters' demands for low-carbon steel, aluminium and e-fuel credits into industry association lobbying ahead of the EU member-state positioning phase; a failure to adjust the CO₂ targets could leave Porsche facing fines that undermine its cost-cutting progress.

Risk & Opportunity Assessment

Commercial RiskHighPorsche's sales volumes are declining, especially in China where deliveries halved, and the 10-year plan depends on new models and multi-billion-euro cost savings materialising; failure would deepen margin erosion and impair the brand's financial independence within the VW Group.
Competitive RiskHighChinese luxury EV makers are capturing market share Porsche is losing, and the company's refusal to engage in a local price war while lacking a competitively-priced electric sedan leaves it vulnerable, especially as the Taycan’s appeal wanes.
Regulatory RiskHighTighter EU CO₂ fleet targets without the flexibility Leiters demands (credits for green steel, aluminium and e-fuels) would force costly compliance measures; US tariffs, which Porsche can only partially offset through pricing, represent an ongoing margin squeeze.
Reputation RiskMediumCutting 9,000 jobs and reducing variant counts could be perceived as weakening the 'exclusive sports car' promise; however, the employment guarantee and new top-end models may offset negative sentiment if the strategy is communicated carefully.
Technology DisruptionMediumThe slower-than-expected EV transition forces Porsche to sustain combustion and hybrid development, but the company risks falling behind Chinese competitors on digital cockpit and autonomous driving technologies unless it accelerates its China-for-China development loop.
Commercial OpportunityHighThe planned combustion Macan counterpart, a supercar above the 911 and a large US-focused SUV can tap high-margin niches that competitors have vacated or under-served, while the € billions in cost savings could restore operating margins even in a flat volume scenario.