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Analysis of Porsche share price

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Porsche: solid results in Q1 2021

01/06/2021 - 12h18

Porsche is undoubtedly one of the most profitable car manufacturers in the world. In a difficult context marked by the health and economic crisis, the group achieved a positive performance in Q1-2021

Elements that can influence the price of this asset:

Analysis N°1

The number of sales achieved by the Porsche group each year is of course a very important element to follow and the evolution of these figures gives a good indication of the financial and economic health of this group.

Analysis N°2

Investments in research and development as well as the creation of new generation vehicles or concept cars will also be studied with the greatest care.

Analysis N°3

We will also keep an eye on the development of production and distribution facilities and the development of the group's service network.

Analysis N°4

Government policies and taxes imposed by certain countries also have an influence on the profitability of the Porsche group and its sales abroad.

Analysis N°5

The global economic health, especially in times of recession, is something you need to take into account as well.

Analysis N°6

Finally, all publications from Porsche's competitors will be closely monitored.

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General presentation of Porsche

The Porsche Group is a German group specialising, as you probably know, in the design, production and marketing of sports, luxury and racing vehicles. More generally, the turnover achieved by this company comes mainly from the sale of automobiles, but also partly involves the provision of services such as sales financing or insurance, and the sale of spare parts and accessories for its vehicles.

Of course, the Porsche Group is reaching an international market with, however, more activity in Europe and of course in Germany.

Analysis of Porsche share price
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The major competitors of Porsche

Here we take a closer look at the other major groups in the luxury car sector and therefore the main competitors of Porsche and some details about these companies.

Aston Martin

First of all, the British car manufacturer Aston Martin is of course a serious competitor of Porsche. It produces luxury cars and racing cars and was founded in 1913. It has been a subsidiary of Prodrive since 2007. The name of the group comes from the car created by Lionel Martin that won the Aston Clinton race in 1914.

Bentley

The Bentley Group is another competitor to Porsche and is a UK-based luxury car manufacturer established in 1919. It is now part of the Volkswagen Group since its takeover in 1998. However, it is one of the largest groups in this sector in terms of turnover and number of vehicles sold.

Bugatti

Still among the major competitors of Porsche, there is of course the Bugatti group which is a French company specialised in high performance vehicles and which was founded in 1909 by an industrialist of Italian origin, Ettore Bugatti. Over the years, Bugatti has become an internationally recognised brand in the field of high-end vehicles, thanks in particular to its sports collections with large engines.

Ferrari

It goes without saying that you should also keep a close eye on the Italian car manufacturer Ferrari, based in Maranello and founded in 1947. The group owes its commercial success to the numerous competitions won by its team in motor sports, which have enabled it to develop techniques that equip its production models and give them exceptional performance.

Jaguar

Another major player in the premium car sector is the Jaguar Group, officially known as Jaguar Cars Ltd, a British luxury car manufacturer established in 1922. This company is now part of the Jaguar Land Rover Group.

Lamborghini

Last but not least is the car manufacturer Lamborghini, which was founded in 1963 by industrialist Ferruccio Lamborghini and is based in Sant'Agata Bolognese, Italy. The company used to specialise solely in the construction of tractors and agricultural machinery for the growing demand in Italy due to the devastation caused by the war. It then specialised in high-end, sports and luxury vehicles.


The major partners of Porsche

The Porsche Group also owes its success and reputation to the various partnerships it has been able to establish and maintain over the years.

ExxonMobil

This is particularly the case with the partnership set up more than 20 years ago with the ExxonMobil group for the research and development of innovative motor oils. To celebrate this anniversary, they have renewed their partnership for another five years until 2021.

Microsoft

Finally, Microsoft has also been a partner of Porsche for its Forza game since 2017.

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The factors in favour of a rise in the Porsche share price:

First of all, the Porsche Group naturally enjoys an excellent reputation and a strong brand image. Indeed, over time, this group has made a name for itself in the very privileged world of luxury cars and its brand is now known throughout the world. To achieve this goal, Porsche has based its strategy on its presence in motor sports but also on a certain respect for the motoring tradition. The vehicles produced by the group are considered both top-of-the-range and powerful.

Although the number of vehicles offered by the Porsche group is relatively small, the possibilities of declining these different vehicles with numerous options and extensions are nevertheless appreciated. Thanks to these few models, Porsche also manages to position itself in different segments such as SUVs, sports cars or luxury sedans and thus reaches different types of customers.

As briefly explained above, the Porsche Group is also a reference in the world of sport and more specifically in the field of motor racing. The Porsche brand is also the strongest brand in this field thanks to the quality of its vehicles. It should be noted here that the brand also has a line of production machines entirely dedicated to motor racing. Some models of cars dedicated to this sport and of the Porsche brand have moreover become true emblems of motor sports and are adored by motor sport enthusiasts.

This brings us to another of Porsche's strengths, which is its fan base. After all, Porsche is not only a luxury car brand for high-end customers, but also a brand that appeals to all lovers of beautiful cars. Although not all fans of the brand are real customers, they contribute to the brand's continued existence and popularity around the world.

Finally, the last asset that the Porsche Group has is undoubtedly the employee base it has at its disposal. Thanks to more than 12,000 qualified employees, Porsche benefits from an efficient technical and managerial basis to produce more efficiently with regular improvements to the vehicles produced.

The factors in favour of a drop in the Porsche share price:

First of all, the fact that the Porsche Group's products are very expensive is of course a significant brake on its growth. The vehicles of this brand are in fact designed for a very specific segment of the population, i.e. the wealthiest consumers. This is causing sales to become increasingly weak as the economic crisis reduces the number of potential customers for this type of very high-end car. However, Porsche is not currently seeking to develop further in the mid-range segment and is maintaining its strategy in the luxury segment, which could harm its future revenues.

Finally, the second and last weak point of this company also concerns the cost, but this time the maintenance cost of the vehicles produced by Porsche, which represents another brake on sales. Indeed, compared to other competing models of luxury and sports vehicles, Porsche models are more expensive to maintain . In addition, each new model of Porsche vehicle put on the market presents increasingly higher operating and maintenance costs, while the trend is more towards economical and ecological vehicles, even in the luxury sector.

As you can see, the weaknesses of the Porsche group are far less numerous than its strengths and concern above all the price of the vehicles. However, the weight of these weaknesses can prove to be important when investors make their decisions.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

How are Porsche sales progressing over time?

When we look at the sales achieved by the Porsche group over the last few years, we notice a significant increase in the figures, which clearly demonstrates the company's capacity for growth. In 2019, Porsche sold 280,000 vehicles, compared to 256,225 in 2018 and 246,375 in 2017. Apart from between 2008 and 2010, these figures have always shown a positive trend.

Who owns the Porsche company?

The Porsche Group is actually a subsidiary of the German group and car manufacturer Volkswagen. The latter also owns other brands of motor vehicles including Audi, Bugatti, Seat, Cupra, Skoda, Lamborghini, Bentley, Ducati, Scania and MAN, as well as JETTA in China. The group is also diversifying its activities with a range of financing, leasing and fleet management services. Today, Volkswagen is still the world's leading car manufacturer.

How to anticipate a rise in the Porsche share price?

In order to take a buying position on the Porsche share at the best time, it is necessary to know how to identify the events that will make the share attractive to investors. Of course, the publication of rising financial results is a concrete example, but also the takeover of vehicle brands or technological innovation in car manufacturing. However, we will also monitor data from technical analysis.

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The content in question is provided for information purposes only and should not be considered as investment advice. Past performance is no guarantee of future results. The trading history is less than 5 years old and may not be sufficient to serve as a basis for an investment decision.

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