The COVID-19 pandemic has certainly affected automakers' vehicle production and sales figures for the first three months of 2020. Companies such as Mercedes-Benz, Toyota, Mitsubishi, Honda, and Suzuki posted figures that paled in comparison to 2019's first three months.
It seems, however, that Porsche was actually able to make money for the first three months of 2020 compared to Q1 of 2019. Last year, Porsche was able to rake in EUR 5.8 billion in revenue. Not bad, but the company was actually able to make more this year with EUR 6 billion. How so you may ask?
According to Lutz Meschke, Deputy Chairman of the Executive Board at Porsche AG, the automaker was able to make a slight increase in revenue due to income stemming from business units beside the car business. “At €6 billion, the company was even able to achieve a slight increase in sales revenues as compared to the previous year. This was due to a positive model mix, and the business units besides the car business also developed positively,” added Meschke.
The Deputy Chairman added, however, that due to the COVID-19 pandemic, a drop in volume and costs related to the continued high investments in electrification business digitization worked against the positive development. Aside from the drop in costs and the global pandemic affecting profits, the automaker also mentioned that increase in overheads from the introduction of new models like the Taycan also resulted in the company's less than stellar performance this year.
On the flip side, Porsche's workforce grew by 1% as the company now has 35,866 employees. This means that despite the global pandemic, Porsche was able to recruit additional 2,794 employees. Porsche claims that this was due to the company hiring additional workforce to build the Taycan, as well as the all-new 911.
“The global corona crisis is a major challenge for Porsche. It is important to maintain an essentially optimistic overall approach and systematic management so that when the crisis is over, work can be resumed at full speed. We are committed to our investments in the future in terms of electrification and the digitalization of our cars,” said Oliver Blume, Chairman of the Executive Board of Porsche AG.
To date, Porsche has started building cars once more at its Zuffenhausen and Leipzig factories. Initially, the factories are building cars at a reduced capacity. Once production ramps up, however, Porsche is looking to build more cars at a faster pace. To keep the workforce safe from the disease, safety measures have been put up in both factories. These include employees requiring to observe a minimum distance of 1.5 meters from one another, and the wearing of face masks at all times.
With Porsche only producing a total of 53,125 cars in Q1 of 2020 due to COVID-19, (Q1 2019 saw Porsche make 55,700 cars), the automaker is looking to manage costs, liquidity, and cash flow in order to protect its business. The company is also planning to prepare for the increase in demand after the global pandemic has passed.