Luxury cars and China have been a love story for years. A booming economy, rising middle class, and a taste for the finer things fueled an appetite for brands like Porsche.
For nearly a decade, China was Porsche's crown jewel, its largest market worldwide. But things have taken a sharp turn this year, and the German automaker is feeling the heat.
Porsche’s sales in China have dropped a staggering 29% in the first nine months of 2024, according to Boosted.
This is no small dip — it’s a full-on crash for a brand that once thrived in the country.
The decline has forced Porsche to rethink its approach, and the first step is cutting back on its dealerships. Around 40 locations are set to close, which means a reduction of about 30% of its current network in China.
Pulls Back from Slow Business
The company hasn’t said which dealerships are on the chopping block, but the strategy is clear.
Porsche plans to pull back from areas where business has slowed to focus on regions with stronger sales, such as Shanghai and Beijing. These major cities remain bright spots in an otherwise tough market.
For the dealerships that are shutting down, Porsche has promised some form of financial compensation. However, details on what that looks like haven’t been shared yet.
This shift comes as the luxury car market in China faces new challenges.
Economic uncertainty, tighter regulations, and competition from other high-end brands and electric vehicle makers are reshaping the landscape. For Porsche, the pressure is on to adapt.
Elsewhere, though, things look brighter. In Denmark, for example, Porsche’s performance has been solid. With just three dealerships in the country, the brand has sold 574 cars so far this year.
That’s a respectable number for a luxury carmaker and well above what brands like Mitsubishi or Lexus managed during the same period.
