Porsche debt burden lessens

German luxury car manufacturer Porsche is reported to have reduced its debt burden, achieving a double-digit operating margin in the first half of its financial year.

According to Reuters, Porsche's debts reduced from 11.4 billion Euros in November 2009, to 6.1 billion Euros at the end of January 2010. This rapid drop in debt has been attributed to a 3.9 billion Euros disposal gain, when it sold half of its business to fellow German manufacturer Volkswagen in December 2009.

The Financial Times reports that the merge is set to continue, as VW is set to consolidate the rest of Porsche's business by 2011. VW, whose models include the popular Golf and Scirocco, announced last week that it had made profits of around 330 million Euros in its sports car arm, during the first half of the financial year.

Whilst the future is looking more positive for Porsche, the company expects to make a loss in the full year. Sales of its famous 911 model are down to 1.7 per cent lower than the same period last year, with 33,670 models sold.

The picture is the same for many luxury car manufacturers, who with the global economic crisis have seen a decrease in demand in Europe, but conversely an increase in emerging markets.

With a drop in sales of such new luxury models, the price of used Porsche's have stayed consistent, with little or no depreciation. This has prompted some owners to proclaim 'I need to sell my Porsche' for investment reasons.

 

Alex Bowman, Harrow, Audi A2 TDI SE

Stephen Wilson, London, AUDI A5 COUPE