Porsche Mulls Doing Some Final Assembly in US to Ease Tariff Hit
(Bloomberg) -- Porsche AG is considering shifting certain last parts of its model assembly to the US as a way to blunt the impact of Donald Trump’s tariffs on imported vehicles, according to people familiar with the matter.
The Volkswagen AG controlled sports-car maker could move steps of the final assembly process, such as the installation of interior components or the fitting of tires, to a US location from Germany, said the people familiar with Chief Executive Officer Oliver Blume’s thinking. Porsche currently doesn’t produce any cars in the US, leaving it highly exposed to the tariffs.
Other possible measures are also under consideration, and Blume has told the people that all options are on the table.
The CEO has repeatedly said he isn’t considering moving production to the US from Germany, where most of the brand’s manufacturing — from building out the body skeleton to joining it to the underlying powertrain — would still take place.
Moving the final parts of the assembly process to the US could preserve Porsche’s “Made-in-Germany” cachet while placating Trump’s desire for more manufacturing to take place in the US. Parent Volkswagen operates several plants in the US.
A spokesperson said there are currently no plans for Porsche production in the US.
Porsche’s ambitions of boosting its status as a high-growth, high-margin luxury brand have been undermined by sluggish demand for its electric models, the collapse of the luxury market in China and new duties in the US, its biggest market. Most vehicles imported to the US became subject to a 25% duty in April.
Porsche has twice revised its guidance this year and is moving forward with restructuring efforts to cope with economic uncertainty in Europe, China and the US. It is reducing its headcount in Germany and backing away from some of its battery ambitions.
Rival Mercedes-Benz Group AG is already planning to move more production to the US in response to the tariffs.
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