Porsche is undergoing significant changes in its approach to the Chinese market, which was once its largest single market globally. A sharp decline in demand for its luxury vehicles, coupled with the rising popularity of locally-produced models from domestic brands, has prompted the German automaker to scale back its dealership network by approximately 30% by the end of 2026.
Porsche to Close 30% of Dealerships in China
Currently operating 138 dealerships across the country, Porsche plans to consolidate this number to around 100 locations. The decision aligns with a broader strategy to optimize profitability and focus on high-performing regions such as Shanghai and Beijing.
“By the end of 2026, the number of Porsche Centers in China will be consolidated to approximately 100,” said Alexander Pollich, CEO of Porsche China, during an investor call. “Our optimization aims to enhance overall network profitability, creating a multi-win scenario for Porsche, its dealers, and customers.”
Pollich refrained from disclosing which dealerships would close but assured that Porsche would provide financial support to its dealer partners, including trade-in programs and wholesale assistance to ease the transition.
Declining Sales in a Competitive Market
For eight consecutive years, China was Porsche’s top global market. In 2021, Porsche sold 95,671 vehicles in the country, surpassing sales in Europe (86,160 units) and the U.S. (70,025 units). Despite a slight dip in 2022 to 93,286 units, China remained the leading market.
However, in 2023, sales fell significantly to 79,283 vehicles, and the first nine months of 2024 saw a 29% decline in deliveries. This sharp drop highlights the challenges Porsche faces, as Chinese consumers increasingly gravitate toward domestic EVs and tech-centric vehicles.
A Renewed Focus on Luxury and Innovation
Porsche’s strategy includes more than just dealership closures. To retain its premium appeal and adapt to the tech-savvy Chinese audience, the automaker is:
- Introducing Connected Technologies: Enhancing showroom experiences with cutting-edge tech and offering real-time production and delivery updates via the Porsche app and WeChat.
- Localizing Innovation: Establishing a technical division in China to design features tailored for the Chinese market.
Pollich expressed confidence in Porsche’s resilience despite the challenges:
“Amid the challenges of today’s market, we remain confident in the resilience of the market and are steadfast in our commitment to Porsche’s core values of sportiness and performance. Adjusting the dealer network safeguards profitability while ensuring exclusive services for our customers.”
Pollich
Future Outlook
By concentrating its efforts on profitable regions and investing in technological advancements, Porsche aims to sustain its presence in China’s competitive automotive market. The move reflects a pragmatic approach to preserving brand exclusivity and long-term profitability, even as sales volumes adjust to shifting consumer preferences.
