Porsche Calculates Losses Of Tens Of Billions Of Euros Due To Volkswagen Issues

Model 2025 from 911 GT3 and 911 GT3. (Doc. Porsche AG)

JAKARTA - Porsche SE, Volkswagen's main shareholder, is expected to suffer heavy losses due to the problems faced by the German giant car manufacturer.

In an official statement, the Porsche SE stated a potential loss of up to 20 billion euros (approximately Rp336 trillion) due to a decrease in the value of their share ownership in Volkswagen. This is a major blow to the Porsche SE, as well as an indicator of how the cost crisis that Volkswagen is experiencing has shaken investor confidence.

Volkswagen is currently struggling with various challenges, ranging from high production costs, intense competition from Asian manufacturers, to tense conflict with unions over factory closures and pay cuts.

As holder of 31.9 percent of ownership shares and 53.3 percent of voting rights in Volkswagen, the Porsche SE is directly affected by the crisis the auto giant is experiencing. Losses estimated at 7 billion to 20 billion euros are much larger than the current Volkswagen stock market value (about 14.3 billion euros).

The unpaid cost-saving negotiations with unions forced Volkswagen to postpone the finalization of its annual financial plans. As a result, Porsche SE was forced to use analyst predictions to make their financial estimates.

In addition to losses in Volkswagen, the Porsche SE also anticipates a decrease in the value of their share ownership in the Porsche AG (extreme sports car manufacturer) by 1 to 2 billion euros.

Market uncertainty, decline in demand in various countries, and increasing geopolitical tensions and tendency to protectionism are the main reasons behind the estimated loss.

With this condition, the Porsche SE draws an estimated net profit in 2024 which was previously predicted to reach 2.4 billion to 4.4 billion euros. However, they still plan to distribute dividends for this financial year.