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Technology, model costs to limit Porsche's 2014 profit
March 14, 2014 / 10:23 AM / 4 years ago

Technology, model costs to limit Porsche's 2014 profit

STUTTGART, Germany (Reuters) - Porsche’s (VOWG_p.DE) pursuit of record profit may suffer a setback this year as costs of new models and technology eat into gains from rising sports car sales.

Employees of German car manufacturer Porsche protect themselves from rain with umbrellas as they wait for a statement from their outgoing CEO, Wendelin Wiedeking, during an employee meeting at the Porsche headquarters in Stuttgart, July 23, 2009. REUTERS/Kai Pfaffenbach

The Volkswagen-owned division expects operating profit in 2014 to at least match the record 2.58 billion euros ($3.59 billion) of last year, which was up 6 percent on 2012 results, Porsche said at its annual press conference on Friday.

Car sales may increase to a new record this year after growing 3 percent in the first two months to 23,286 vehicles, powered by the new Macan compact SUV due to hit dealerships in April, according to Chief Executive Matthias Mueller.

    “This positive trend will strengthen over the course of 2014,” he said at Porsche’s Stuttgart headquarters.

    However finance chief Lutz Meschke said the firm needed to shoulder high spending this year on emission-cutting technology as well as rising personnel costs as the new Macan model helped create 1,500 new jobs at its second German plant in Leipzig.

    Porsche was bought by VW, Europe’s largest automotive group by volume, in 2012. Growth and profit at Porsche are a major part of VW’s efforts to surpass Toyota (7203.T) as the world’s No. 1 carmaker by volume no later than 2018.

    Top managers at Porsche will soon be drawing up a new expansion plan stretching as far as five years beyond existing targets because the carmaker may hit a sales goal of 200,000 cars in 2015, three years earlier than expected, the CEO said last month.

    Reporting by Ilona Wissenbach Writing by Andreas Cremer; Editing by Victoria Bryan and Pravin Char

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