When dreams turn to nightmares: Porsche’s luxury crisis

Porsche is in serious trouble. And the numbers aren’t just bad — they’re structurally alarming. Global deliveries fell 10% in 2025, which is the sharpest decline since the 2009 financial crisis. In China, the engine that powered profits for a decade, sales dropped 26%. Meanwhile, operating profits in the first nine months of 2025 nearly evaporated, plunging 99% to a mere $46.4 million (€40 million). The official narrative points to the frictions of electrification, supply chain bottlenecks, and a fierce pricing war in Asia. These are valid headwinds. But they are symptoms rather than root causes. To accept them as a full explanation is to miss the far more dangerous reality: Porsche is suffering from a fundamental downfall in its value equation. The diagnosis: Arrogance discount For decades, Porsche enjoyed a uniquely dominant position in the market. It offered image, build quality, and performance that no competitor could match at scale. That era is over. Competition has caught up. From the precision of new entrants to the revitalized lineups of legacy rivals, the gap in engineering excellence has closed. In a world where competitors offer comparable, and in some cases superior, performance, the Porsche badge alone can no longer do all the heavy lifting. This closing quality gap exposes a dangerous vulnerability in the current strategy. Over the last three years, the brand has hiked prices at an unprecedented pace. While inflation touched every sector, these increases appeared disconnected from any tangible addition of value, leaving clients feeling exploited. The German luxury car manufacturer was pricing for perfection while delivering a degraded service experience. Importantly, it broke the Veblen law of luxury by increasing prices sharply without adding value, all while aggressively expanding volume. This move stripped the brand of its perceived exclusivity. As a luxury brand strategist who frequently conducts mystery shopping exercises across industries, and as a longtime 911 owner and enthusiast, I have witnessed this deterioration firsthand. The dealership experience has shifted from welcoming to transactional, with dealers acting as if they are doing clients a favor by letting them purchase a car. This is what I call the arrogance discount. When you combine aggressive price hikes with a service culture that treats loyal clients like walking wallets, you invite those clients to purchase elsewhere. My family recently moved our capital to another luxury brand while considering a new Cayenne. We didn’t leave because we stopped loving Porsche; we left because the value proposition no longer made sense. The product misstep: Misreading the room Porsche’s most critical error was a dramatic misreading of clients’ desire for choice. The decision to pivot the Macan and Cayenne toward an electric-only future in key markets was a strategic blunder that even management now admits and is scrambling to correct. Porsche traded its mechanical soul for a software-led identity that the market was not ready to embrace. Luxury is about abundance and choice rather than restriction. By forcing loyal customers into an electric powertrain that many were not ready to adopt, Porsche alienated its base. It stripped the cars of the emotion of an analog engine. The resulting collapse in resale values for models like the Taycan, whose residuals have plummeted, only deepened the wound. Clients are willing to pay for extraordinary performance. They are not willing to be test subjects for a technology that depreciates faster than they can drive it. The broken dream: When confidence cracks There is a deeper mechanism at play here that mirrors the challenges I recently analyzed with Saks. Luxury relies on a fragile equilibrium of trust. Clients expect value to hold. Hence, trust in the brand’s stability is paramount. When a company slips into crisis mode and the airwaves fill with news of worsening numbers and restructuring instead of excitement, the dream begins to fracture. Success itself is a key component of the intangible value Porsche sells. It validates the owner’s choice. By chasing volume, the brand fell into the aspirational trap, becoming overexposed to a middle-class demographic that is easily spooked by economic volatility. When the narrative is defined by decline and job cuts, that intangible value evaporates. Porsche claims to be driven by dreams. Yet for investors and owners watching the brand stumble, the current reality feels more like a nightmare. This crisis is much bigger than it seems at first glance because it attacks the core desirability of the brand. The prescription: A strategic reset The question now is not who is to blame but what management must do to stop the bleeding. The path forward requires three decisive actions. First, Porsche must commit to a service revolution. If the brand intends to charge Hermès prices, it must deliver Hermès hospitality. The days of dealership arrogance are over. The dealer network needs to be retrained to value relationship retention over transaction volume. Every client walking into a showroom must feel the brand’s appreciation, not its hubris. Second, the product roadmap needs an immediate reality check. Management must pivot to an agnostic powertrain strategy that respects what clients actually want. Accelerating the reintroduction of high-performance hybrid and internal combustion options for the Macan and Cayenne is a necessary alignment with market reality. These must differentiate tangibly and emotionally from competitors. Third, the brand must close the value gap. If prices are to remain at these elevated levels, the product and experience must become dramatically better. You cannot charge a premium for a product that competitors now match or exceed in quality unless the intangible value is undeniable. Right now, it is not. Porsche is a textbook example of the luxury lifecycle trap, a concept I explore in my book Luxury Marketing and Management. When growth seemed unstoppable, too many compromises were made, and the brand lost clarity. Today it faces a critical inflection point. Recovery will only come when the leadership in Stuttgart acknowledges that the gap between price and value has grown too large. The brand has the heritage to fix it. It now needs the humility to listen. This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders,” and advisor to some of the most iconic luxury brands in the world. He serves as an executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at NYU, New York. Daniel has authored best-selling books on luxury management in English and Chinese, and is a respected global keynote speaker. Daniel conducts in-person masterclasses on various luxury topics across the world. As a luxury expert featured on Bloomberg TV, Forbes, The Economist, and others, Daniel holds an MBA and a Ph.D. in luxury management and has received education from Harvard Business School. Sign up for his online luxury masterclasses at the Jing Academy.

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When dreams turn to nightmares: Porsche’s luxury crisis