Porsche Pins Future on Combustion 911 as AGM Criticism Mounts Over Sliding Margins and Dividend Cut

Porsche confirms 911 will remain combustion-engine, cuts dividend sharply, and slashes China dealer network amid 'Strategy 2035' turnaround. Stock falls 2%.

Porsche has drawn a clear line under its electrification ambitions for the iconic 911, with chief executive Michael Leiters telling shareholders at the annual general meeting that the sports car will remain a combustion-engine model even as other nameplates go electric. The announcement landed as investors absorbed a sharply lower dividend and a sobering outlook for profitability, sending the stock down roughly 2% on the day to €46.63. The shares have since slipped further to €46.41, leaving them about 8% below the 52-week high of €50.56 set just a week earlier.

The strategic pivot, dubbed “Strategy 2035,” aims to restore sustainable profitability by trimming model variants and deepening cooperation with parent Volkswagen’s Audi division. The electric Cayenne is due to launch this summer, but Leiters explicitly ruled out a battery-powered 911, preserving the model’s combustion identity. The move underscores Porsche’s attempt to defend its luxury positioning even as it confronts a brutal downturn in China, its most problematic market. Under the “Winning Back China” programme, the dealer network will be slashed from 150 outlets to 80 by the end of 2026, prioritising exclusivity over volume.

Financial strains were laid bare at the meeting. Shareholders approved a dividend of €1.01 per preference share and €1.00 per ordinary share, a steep cut from the previous year that will see the group pay out roughly €916 million. Leiters argued the reduction was necessary to preserve financial flexibility during the transformation. The stock will trade ex-dividend from 24 June. The company is targeting revenue of €35 billion to €36 billion for the current year, with an operating margin of 5.5% to 7.5%.

Exceptional charges, however, are weighing heavily. Restructuring costs of €800 million to €900 million and tariff expenses of around €700 million are hitting earnings. The first quarter already offered a taste of the pressure: deliveries fell to just under 61,000 vehicles, dragging the operating margin down to 7.1%.

Ingo Speich of Deka Investment, a prominent institutional shareholder, did not mince words at the meeting, describing the situation as a “Scherbenhaufen” — a pile of shards. He accused management of strategic failure, pointing to the stock’s underperformance relative to the broader market. Despite the verbal fire, the non-voting preference shares meant the criticism had no immediate voting consequences.

Leiters cautioned against expecting a swift recovery to the record margins Porsche once enjoyed. The company is focusing on high-margin luxury models and strict cost control, but the payoff will take time. The next major test comes on 7 October, when Porsche holds a Capital Markets Day to flesh out Strategy 2035 in detail. Investors will be looking for a clear choice between pursuing volume growth or doubling down on pure luxury.

On a twelve-month basis, the stock has still managed a 13.23% gain, and it remains above both its 50-day moving average of €45.11 and its 200-day average of €43.45. The half-year financial report, due on 29 July, will provide the first concrete evidence of whether the cost-cutting measures are taking effect and whether the electric Cayenne can deliver the sales needed to stabilise the top line.