Amid an unprecedented supply shortage of aluminium alloy, Porsche AG has reduced its sales and profit outlook, which has led to the German company’s shares falling 4 per cent to the bottom of Frankfurt’s blue-chip index.
The news came after the luxury sports car maker said that a shortage of aluminium alloy supply in the market due to floods at Novelis’ Swiss site affected the production of all its models, possibly resulting in a suspension of manufacturing one or more vehicle series.
According to the report, US-based Novelis had to shut down a Swiss site due to floods in the canton of Valais, at the end of June. Since then, the aluminium producer is working with its customers to minimise the impact of this natural catastrophe. However, the shutdown of the plant has affected its deliveries to the automotive customers in Europe.
According to Porsche, the alloy shortage also affected the supply chain of BMW, but the German premium car maker dealt with the situation and did not let production be impacted.
Porsche said its alloy supplier declared force majeure in writing, which means it would be unable to meet its contractual obligations. This unexpected incident has exposed Porsche to a supply chain disorder of raw materials for producing cars. Body components made of aluminium are used in all vehicle series of Porsche. Challenges to vehicle production have also resulted in a sales slump for Porsche.
Bernstein analysts said the shortage of alloy supply could lead to the production loss of at least 10,000-17,400 vehicles in the second half of 2024, which is equivalent to more than 11 per cent of first-half deliveries.
In line with the anticipated production drop, Porsche AG expects sales between €39 billion and €40 billion and a return on sales between 14-15 per cent for 2024, down from its previous expectation of 15-17 per cent.
Porsche also reported that it had been facing a muted demand in China, driving global deliveries down by 7 per cent in the first half of 2024. The company is also struggling with its electric vehicle sales this year.
