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The benefits of Porsche and Volvo cars fell sharply in the first quarter while the two European manufacturers warned of a heavy price on the Donald Trump trade industry.
The automotive industry rushed to reduce costs and protect cash flow after the American president imposed a 25% rate on all imports of foreign manufacturing cars from early April, with some exemptions for Mexico and Canada. A separate 25% sample on automotive parts should take effect from May 3.
Trump plans to spare manufacturers Of some of its most expensive prices such as those of steel and aluminum, in a rise after intense lobbying by industry leaders. But uncertainty about the final form of its prices has made it difficult for companies to calculate their cost.
Porsche said on Tuesday that its group operating profit fell 40% in the first quarter to 762 million euros, compared to 1.28 billion euros in the same period last year, due to the negative effects of prices, costs associated with its pivot to focus only on battery vehicles and a drop in vehicle deliveries.
Financial director Jochen Breckner said that the company expected the environment “remains difficult”, adding that “we cannot completely escape that, but we do everything in our power to counter it”.
The luxury car manufacturer is particularly exposed to American prices because it manufactures all its cars in Germany. He also suffered from a drop in sales in China.
On Monday, the company based in Stuttgart said that it expected its return to the margin of sales, in a range of 6.5 to 8.5%, compared to previous forecasts from 10 to 12%.
The second reduction in Porsche directives in two months reflected the “negative impacts” of American prices for April and May, but additional planned prices have not yet been included. His shares dropped 1.1% Tuesday morning.
Porsche said that a decision against the expansion of production in its Cellforce battery manufacturer, as the slowdown in demand for its electric vehicles, driven by a drop in China, would contribute to an increase in “special expenses” in 2025 of 800 million euros to 1.3 billion euros.
Tuesday, Volvo Cars launched a SKR18 billion cost reduction program ($ 1.9 billion) and withdrew its advice for this year and 2026 due to pricing uncertainty after reporting a 59% drop in operating profits.
“Given the turbulence on the market, we must further protect our generation of cash flows and reduce our fixed costs,” said Håkan Samuelssson, who returned as general manager this month to sail in American prices.
Samuelsson said the details of the workforce reduction would be made public later. The actions of the car manufacturer fell 9% on Tuesday.
During the first months of the year, Volvo announced an operating profit of 1.9 billion SKRs, down 4.7 billion SK a year earlier and much less than the SKR2.7 billion analysts expected, according to S&P Capital IQ.
In February, the company warned against profits and lower volumes this year, while aiming for a margin of operational profit of 7 to 8% in 2026.
