Porsche will raise prices to combat higher costs

Porsche will raise prices by 4 per cent to 8 percent in Europe and the U.S. in the second half to combat higher costs that weighed on returns in the first quarter

The company is still seeing issues with the supply of semiconductors and parts for the electric Taycan's high voltage heating system, but expects them to ease in the coming months, Chief Financial Officer Lutz Meschke said on Wednesday.

Operating profit rose to 1.84 billion euros ($2.03 billion) while revenue increased to 10.1 billion euros in the first quarter, the company said. That’s roughly 25 percent higher than last year when supply-chain disruptions were dragging on the industry.

Deliveries increased 18 percent to 80,767 vehicles, boosted by a large increase in China.

Porsche reaffirmed its targets for 2023 of hitting a return on sales of 17 percent to 19 percent on revenue of 40 to 42 billion euros ($44.1-$48.5 billion). Porsche said its return on carmaking was 18.2 percent in the first quarter.

Operating profit in its financial services arm declined to 86 million euros from 102 million previously, which it attributed to the valuation of interest rate hedges and derivatives as well as the impact of the interest rate rise on financing products.

The maker of the 911 sports car, which remains majority owned by parent Volkswagen Group since last year’s listing, is targeting a move further upmarket to battle Ferrari.

Porsche is planning an all-electric high-performance crossover above its Cayenne, slated for around 2026, as part of a plan to boost operating margins to more than 20 percent.

Bloomberg contributed to this report