Porsche to suffer falling profits due to increased input cost
Porsche AG shares took a beating in the share market after the legendary automaker announced that the development costs for the new Panamera car and a hybrid engine for the Cayenne sport-utility would result in a less than expected profit. These new products are going to cost Porsche a lot and that would show its effect on the next financial report of the company.
This report was released to the media by the Chief Executive Officer Wendelin Wiedeking who was addressing a press conference in Stuttgart, Germany. He has taken the risk of investing in the development of a fourth model line to maintain more than a decade of sales growth for Porsche. The company would also suffer a bit due to Inflation, higher oil prices and poor economic growth in the region.
However, market experts are not worried and say that continues development is essential for any company to secure its future. If Porsche wonâ€™t innovate to face the challenges of the future, it would become hard for it to survive the onslaught of the automakers like Toyota and Honda, which are becoming more and more dominating world over.
The company is however also expecting vehicle sales and revenue to grow in the current year as they have launched new versions of the Boxster and 911 models last year as well as an all-new sports car, the Cayman, this year.