For years, China was Porsche's growth engine, but now it's dragging the brand's sales figures down. The German automaker is preparing to close around 30% of its dealerships in China due to an ongoing sales slump.
According to Porsche China CEO Pan Liqi, the dealer cull is about cutting costs, with plans to reduce the number of dealers from 150 to 80 by 2026. This move follows a rough end to 2025, when several dealers halted operations, leaving Porsche China to sort out customer deposits and missing paperwork.
Sales have halved since 2022, with just 41,938 cars delivered in 2025, down 26% year-over-year. Globally, Porsche is also hurting, with worldwide deliveries falling 10% to 279,449 cars.
The company's struggles in China are attributed to the rise of local electric car brands like Xiaomi, which has been a particular problem for the Taycan. In response, Porsche is leaning back toward combustion and hybrids, at least in the short term.
The company plans to redirect savings from dealer closures into research and development, including its new integrated R&D center in Shanghai. Porsche will prioritize quality over quantity in 2026, suggesting it's bracing itself for another grim year.
Porsche's struggles in China are a classic case of a luxury brand struggling to adapt to changing market dynamics. The company's decision to focus on combustion and hybrids is a pragmatic move, but it may not be enough to stem the decline. As the Chinese market continues to evolve, Porsche will need to find a way to reinvigorate its sales strategy if it wants to remain competitive.
