The Less You Rely on China, the More You Earn! Porsche Proves It: Ditch China, Profits Soar 40X

I can't even sell a Mercedes for a few tens of thousands of yuan. If it won't sell, I'll smash it. This BMW is in such good shape. If I can't sell it, am I supposed to pay to have it scrapped? If it won't sell, I'll smash it. I'm starting to speak now. I'm starting to speak now. I can't even sell an Audi for a little over 100,000 yuan. There's no point in trying. Who's buying? The asking price for this car is only 5,800 yuan, and the customer still keeps bargaining. 800, 800, 800. I'd rather smash it than sell it. Hello, Bobby. You just boomed me up. Smash it up. I'm not selling it. Smash it up and scrap it. In the used car business, fast turnover is essential to survival. Dealers generally consider an inventory holding period of less than 15 days safe. Once a car sits for more than 45 days, they usually have little choice but to sell it at a steep discount and absorb the loss. Gross margins used to hold steady at 5%. Now they have shrunk to 3%. Many dealerships are closing locations and cutting staff. Two-thirds of the cars in the inventory lose money when sold. Dealers are using low-price models to attract customers and relying on sales volume to barely keep their businesses going. China's used car market has recently seen a sharp plunge in prices for luxury gasoline-powered vehicles. Luxury cars like this are really cheap now, guys, only a few ten thousand yuan. These luxury cars really aren't worth that much anymore, folks. Just a few tens of thousands of yuan. The used Porsche is only 60,000 yuan. But you need more money than just the purchase price to buy a car like this. You can use this license plate for the first six months, alright? You'll have to figure out the title transfer or any other arrangements yourself. There's an older model and a newer one. The older model is really cheap now, and has only about 49,000 miles on it. Cars in Hong Kong generally don't have high mileage. The passenger side is in decent shape. The features are fairly basic, but the transmission is the same type used in Porsche sports cars. Everyone, a Porsche for 50,000 yuan. Folks, a Porsche Panamera for 50,000 yuan, that's quite a price. It's an older model fully updated to look like a newer one, inside and out. It has a passenger entertainment screen, a center display with Kugou music, a newer gear selector, and a newer steering wheel. Wow, I'm running out of words to describe it. Let's take another look at the exterior. The rear hasn't changed. The front has newer headlights. They say Porsche is invincible, but this time it's really crashed. Everyone says Porsche prices have collapsed. And this time, they really have. I bought this Porsche Macan today for just over 60,000 yuan. The owner told me someone else had offered him a little over 60,000 and asked me to add a little bit more. I was stunned. A Porsche Macan for a little over 60,000 yuan, and its condition is at least 80% as good as new. It has Bose audio, a compass, air suspension, and keyless entry, all of it. Those options alone cost more than 100,000 yuan when it was new, with a Porsche Macan down to just over 60,000 yuan. Volkswagen, Toyota, and Honda are going to have a hard time competing. If I were in the crowd, would you cry or laugh? Folks, imagine all the unsold cars in this showroom belong to you. That much inventory would be hard to feel good about. The more it piles up, the more worried I get. Take a look at this Porsche 718 Cayman. It has about 37,000 miles on it, a white exterior, and a red interior. The asking price is just 228,000 yuan. Domestic electric vehicles and plug-in hybrids are putting these luxury brands under enormous pressure, driving prices right down. I can hardly believe this car still hasn't sold. It's been sitting here for 60 days. Take a look inside this Porsche. The interior is all red. It has the Cayman rear spoiler. It's a standard two-seater. Look for yourselves, folks. Even the carpeting is red. It has memory seats, but no sport chrono package. Now let's look at the back. I think this is a pretty good car. It's in original condition throughout, and the asking price is low. The interior really is all red, yet it's still so hard to sell. It also has a power-operated rear spoiler. Just 228,000 yuan for a Porsche Cayman. This one has a white exterior and a red interior. I could understand other color combinations being hard to sell, but I don't understand why this one isn't selling. It's strange. Look at how many Panameras we have here. A newer Panamera, a 2024 model, with only about 12,400 miles, is listed for just 780,000 yuan. Look around the showroom, folks. We used to have more than 250 cars in stock. Now we don't even have 100. What are we going to do? Feedback from used car markets in cities including Qingdao, Shanghai, and Beijing shows that asking prices for some used luxury cars are nearly halved. Bentley Flying Spurs, more than eight years old, have been listed for as little as 268,000 yuan, roughly one-tenth of their original price. Even a 2014 BMW X6 with more than 124,000 miles now has a market value of just 20,000 yuan. In some extreme cases, entry-level Porsche Macans have fallen to around 150,000 yuan. A 2017 Porsche Cayenne that originally cost more than 1.3 million yuan on the road was recently listed on the used market for just 120,000 yuan. The Volkswagen Touareg, a German SUV whose suggested retail price once approached 900,000 yuan, is now selling used for as little as 68,000 yuan. Used prices for several midsize and large luxury SUVs from brands such as Mercedes-Benz and Land Rover have also fallen sharply in recent weeks. The prices are now approaching those of ordinary compact family cars. Mainland Chinese media reported another wave of price cuts for used luxury gasoline-powered cars in Shanghai in July 2026. Market data shows that luxury gasoline vehicles priced between 300,000 and 1 million yuan have faced the greatest pressure from electric vehicles and plug-in hybrids. At a showroom in Nanjing, price stickers have been stacked one on top of another on a Jaguar XEL. Its price has been cut four times, from 152,000 to 129,000 yuan, yet few buyers are interested. One dealership owner put it plainly, buying cars is difficult and selling them is difficult too. There are fewer used gasoline cars from recent model years because prices have fallen so sharply that owners would rather keep driving them than sell at a loss. About two-thirds of the dealership's inventory is losing money, and gross margins have dropped from 5% to 3%. Some other dealers are stuck with more than 400 cars. Their biggest fear is running out of cash. Confidence among dealers is falling even faster than car prices. Figures show that nearly half of the small and medium-sized businesses specializing in used luxury gasoline cars at Qingdao's Luhai Auto Trading Market have left. Unable to absorb inventory losses and financial pressure, many have quit the business. Some now drive for ride-hailing services, while others run barbecue stalls. Owners who once made their fortune selling luxury cars now depend on gig work and small businesses to get by. Others point out that although these luxury cars may be cheap to buy, they can be expensive to keep. Annual repair, insurance, and fuel bills add up quickly. A single major repair can wipe out the savings on a purchase price. For ordinary families seeking everyday transportation, reliability and ease of ownership should come first. The lower purchase price is only the beginning. Ongoing ownership costs are the long-term bill. The dramatic changes in the used car market also reflect a broader shift towards lower cost consumption. A car reviewer with more than a decade of industry experience recently said on social media. Guys, as I told you before, I used to love cars. Folks, as I've told you before, I used to be a car enthusiast. I've been involved with cars for more than a decade, and I've never seen a market like this. Look at what happened in just one year. Take a Mercedes-Benz GLK, a 2015 or 2014 model, for example. Last year, the going price was around 90,000 to 100,000 yuan. Just one year later, today, you could go to the auction platform we dealers use and get a one-owner car with its original bodywork and paint for 40,000 yuan. I've never seen prices plunge like this. No other year has been like this one. To me, it shows that more and more people are going bankrupt. They still have the car, but they can no longer afford to keep it. Large numbers of used cars are being put on the market. So my advice is to hold off on buying or replacing a car right now. You'll take a heavy loss on whatever you buy. Even a domestic electric vehicle or plug-in hybrid could lose even more value. Everyone needs to spend carefully. China's continuing economic slowdown reflects a structural downturn rather than a short-term fluctuation. The middle class and those approaching affluence have been hit hardest. Many private business owners face plunging orders, unpaid invoices, bank loans being called in, and heavy interest payments on private borrowing. The number who have rapidly fallen back into poverty far exceeds official figures. These people were once core buyers of the Porsche Cayenne, Panamera, and Mercedes-Benz GLS. Now they have little choice but to send their prized cars to the auction. When large numbers of middle-class owners start selling their cars, it suggests they are running short of money. As finances tighten, the possessions that once symbolized their status are often the first to go. Porsche's difficulties in China are among its biggest setbacks since entering the country more than 20 years ago. China once accounted for about 30% of its global sales. Now it's quickly shifted from a growth engine to the biggest drag on its worldwide performance, after serving as a dependable source of profit and growth for two decades. China is becoming Porsche's greatest source of pressure. During the era dominated by gasoline cars, Chinese consumers held German luxury brands in high regard. A Cayenne, a Panamera, was more than a transportation. It represented wealth and social status. That means buyers were willing to pay even as Porsche maintained substantial price premiums. In recent years, however, price wars among domestic brands such as BYD, Geely, and Xiaomi have intensified competition. Several of Porsche's main new models have been offered at unusually steep discounts at dealerships. In August, news that the Panamera's official suggested retail price had fallen below 1 million yuan for the first time became a trending topic online. Mainland Chinese outlet Jimu News reported another round of steep price cuts on several models from traditional luxury brands, including Porsche, Mercedes-Benz, BMW, and Audi, during this year's National Day holiday in early October. Discounts exceeded 200,000 yuan on the Porsche Cayenne and 300,000 yuan on the Audi A8. According to the report, a salesperson at the authorized Porsche dealership in Wuhan's Optics Valley said the 2026 Cayenne Dream Edition had a suggested price of 918,000 yuan before taxes, fees, and insurance. In-stock vehicles with about 100,000 yuan in options were being offered at discounts of 23% for cash purchases and 26% with financing. Some in-stock vehicles cost around 860,000 yuan on the road, including taxes, fees, and insurance. A salesperson with 10 years of experience said the 300,000 yuan Cayenne discounts circulating online were difficult to secure in an actual deal. Still, discounts of more than 200,000 yuan were already unusual by the standards of recent years. From 2020 to 2023, the model generally cost more than 1.2 million yuan on the road. Another of Porsche's main gasoline models, the Macan, has also seen steep discounts. Some in-stock vehicles have been discounted by more than 200,000 yuan, bringing on-the-road Road prices down to between 470,000 and 500,000 yuan. The Macan T, for example, has a suggested retail price of 628,000 yuan, but some in-stock units cost less than 500,000 yuan on the road. Buyers, using financing, can also receive five years of interest-free payments. Porsche's sales in China have fallen for four consecutive years, with a total decline of nearly 60%. After entering China in 2001, Porsche steadily increased sales. China became its largest single market in 2015, and sales peaked at nearly 100,000 vehicles in 2021. The first annual decline came in 2022, when sales fell 2.5%. Pressure intensified in 2023, with sales down 15% to 79,000 vehicles. Deliveries in China fell to 57,000 in 2024 and 42,000 in 2025. Porsche attributed the decline to persistently weakening demand in China's luxury car segment, the impact of luxury car tax changes introduced in July 2025, and intense competition in China. Especially in the battery electric segment, Porsche is reducing its sales network in China. Under its previous announcement plan, the number of sales outlets was to fall from 150 to 120 by the end of 2025, then to around 80 by the end of 2026. Porsche's difficulties now go beyond sales volume. As a familiar saying in the auto industry puts it, The biggest crisis for a luxury brand is losing the ability to command its prices. Porsche's ability to sustain profit margins above 20% in the past depended heavily on the brand's exclusivity and the sense of status it gave consumers. But as dealers offer frequent discounts and actual selling prices keep falling, Consumers gradually come to expect that waiting will bring an even lower price. Once that expectation takes hold, the brand's ability to charge a premium steadily weakens. For luxury brands, restoring pricing power is often harder than increasing sales. That's also why Porsche has continued to scale back its sales network in China in recent years. Porsche said on October 27 that operating profit had rebound despite declines in both revenue and vehicle deliveries in the first nine months of this year. The results offer an early indication that its strategy of reducing its scale and sharply cutting exposure to China is beginning to work. According to recently released financial results from the Volkswagen Group subsidiary, sales revenue fell 5.9% from a year earlier to €25.28 billion or $28.19 billion in the first nine months. Global vehicle deliveries fell 16% to 178,532. Operating profit, however, Rose to 1.74 billion euros, with a margin of 6.9%. A year earlier, profit was just 40 million euros, with a margin of 0.2%. Porsche's sales in China have fallen sharply. North America, meanwhile, has overtaken China as Porsche's largest market by sales volume. During an earnings webcast, Porsche chief financial officer Jochen Brechner said the company's balanced global sales presence continued to help it withstand fluctuations across different markets. Brechner also said Porsche had significantly reduced its exposure to China, making the overall business less dependent on that challenging market. Porsche chief executive Michael Leideker took office at the start of this year. The company's electrification strategy had previously failed to make the expected progress, resulting in restructuring costing 2.7 billion euros. Porsche's supervisory board appointed Leideker to help redirect the company. Leideker recently outlined Porsche's strategy to investors. He plans to expand customization services and introduce more exclusive models with higher profit margins. This will make the company smaller but is expected to improve profitability. Sales of Porsche's high-margin flagship 911 rose 12%, underscoring the company's focus on more profitable models. The 911 was the only Porsche model to record sales growth in the first nine months of the year. Citi analysts said in an October 27th report that Porsche's results for the first nine months remain in line with expectations. On October 7, 2024, Porsche unveiled a new strategy through 2035, reaffirming its focus on value over volume. It's planned to prioritize higher-margin models while streamlining its organization and speeding up decision-making. The company aims to lower its break-even sales threshold to fewer than 200,000 vehicles and achieve a group operating margin of 10-15% over the medium term. Losing some sales in China is painful for Porsche, but if it can preserve its brand premium, increase profit per vehicle, and maintain strong cash flow, investors may see the move as a considered trade-off. Ultimately, however, a company's goal is to generate the most profit, rather than simply sell the most products.