Porsche Puts the Axe to Combustion Macan as Restructuring Costs Bite

Porsche discontinues the petrol Macan, sells Bugatti Rimac stake, and absorbs €900M in restructuring costs as Q1 profit falls 22%.

Porsche is entering one of the most disruptive phases in its modern history, simultaneously killing off its combustion-engine bestseller, severing a nearly three-decade relationship with the Bugatti brand, and absorbing hundreds of millions in restructuring charges — all while first-quarter earnings took a significant hit.

The Stuttgart-based sports car maker confirmed that production of the petrol-powered Macan will end this summer at its Leipzig plant. The facility will pivot exclusively to building the electric Macan alongside the Panamera, leaving a gaping hole in Porsche's lineup until a successor arrives, likely in 2028. The combustion Macan remains a hot commodity in the US, where the electric version struggles without tax incentives, making the timing particularly painful. CFO Jochen Breckner acknowledged the company will sell through remaining inventory into next year, but the model's discontinuation creates an immediate sales vacuum.

The Macan's demise is just one piece of a broader restructuring puzzle. Porsche has also agreed to sell its entire stake in Bugatti Rimac and the Rimac Group to a consortium led by New York-based HOF Capital. The deal, signed on April 24, sees Porsche exit its 45 percent holding in the joint venture and its 20.6 percent stake in the Rimac Group. BlueFive Capital leads the investor group, backed by institutional money from the US and the European Union. The transaction is expected to close before the end of 2026, pending regulatory approvals. Neither side disclosed the purchase price.

The divestment marks the final break between Bugatti and the Volkswagen empire, which acquired the French hypercar marque in 1998. For Porsche, the move is part of a broader effort to sharpen focus on its core brand as it navigates one of the most challenging periods in its recent history.

The numbers from the first quarter underscore the pressure. Revenue slipped 5.2 percent to €8.4 billion, while operating profit tumbled nearly 22 percent to €595 million. Net income fell by roughly a quarter to €391 million. US tariffs alone cost the company around €200 million in the first three months of the year, while the Chinese market continues to soften. The phase-out of the Boxster and Cayman, which ended production in October 2025, compounded the pain — deliveries of the 718 models plunged 60 percent to just 1,792 units. The Panamera fared little better, with a 42 percent drop to 4,498 vehicles. Only the iconic 911 provided a bright spot, posting a 22 percent gain to 13,889 units.

Despite the headwinds, Porsche's operating margin held at 7.1 percent, landing at the upper end of its target range. Breckner pegged special costs tied to the strategic realignment at roughly €100 million in the first quarter, with the full-year figure expected to reach around €900 million. The broader "Strategy 2035" plan calls for eliminating 1,900 positions by 2029, and thousands of fixed-term contracts have already expired. The company scrapped its employee bonus entirely.

The market has taken notice. Porsche's preference shares closed at €41.03 on Thursday before the holiday break, down roughly 13 percent since the start of the year and well off the 52-week high of around €48. Analysts remain cautious. Jefferies rates the stock a "Hold" with a €41 target, while Barclays sticks with "Underweight" at €40, warning that rising development costs could increasingly weigh on the product mix. Bernstein Research sees "Market-Perform" with a €45 target. The average analyst price target currently sits at €42.09.

Management is standing by its full-year guidance, targeting an operating margin between 5.5 and 7.5 percent. The dividend is set to be slashed by more than half to €1.08 per share. A comprehensive strategy update is scheduled for autumn 2026, when investors will get a clearer picture of how Porsche intends to navigate the gap between its combustion-era profitability and its electric future. For now, the company is burning through roughly €800 million in remaining restructuring costs while betting that a leaner, more focused lineup can eventually restore its financial firepower.