As we venture into 2024, the Chinese automotive landscape stands at a vital crossroads, being reshaped by unprecedented influence from various market forcesThe automotive industry has been embroiled in a fierce price war that has lasted for two years, forcing businesses within the supply chain to cope with the dual pressures of domestic competition and technological advancementsThis has led to a substantial transformation in the industry’s structureOver the past six months, local Chinese brands have further penetrated the market, posing significant challenges to both joint ventures and foreign brands in terms of market shareThe surge in sales of new energy vehicles (NEVs)—which have crossed the 10 million mark—has also accelerated the replacement of traditional internal combustion engine vehiclesThus, the journey to adapt to this rapidly evolving market is critical for every player, including firms like Porsche that have previously thrived in China.

After experiencing a decline in its operations in China and losing its status as the largest single market globally, Porsche decided it was time to regroupWith Alexander Pollich taking the helm as the new head of Porsche China, the company announced a significant overhaul of its strategies in the marketThis shift involves the initiation of its '2035 Strategy,' which emphasizes a move from a high-growth mindset to one focused on high qualityThis strategic pivot is aimed at dynamically adjusting to the changing landscape of the Chinese auto market while regaining a strong foothold in this pivotal region.

The notion of quality over quantity resonates deeply in today’s context—a sentiment echoed by Pollich in his recent remarksIn Porsche's latest global sales figures, there was a slight decline of 3% in overall deliveries, totaling 310,700 unitsHowever, the figures from China were particularly disheartening, revealing a staggering drop of 28%. Historically, China has been Porsche’s most crucial market, contributing about one-third of its global sales, yet that contribution has recently diminished to below 20%.

Pollich, now the leader of Porsche in China, noted that the acceleration of home-grown electric vehicle (EV) brands is driving market growth, particularly as premium brands face steeper declines

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This change mandates that Porsche reassess its business structure and market strategiesAfter an observing period of 100 days, Pollich convened the media to outline a renewed approach focusing on 'quality over quantity', branding as a critical asset, and reinforcing that China remains a key market.

Despite the lull in sales, which has prompted widespread discussions about extensive discounts, Pollich is adamant that Porsche will not resort to drastic price cuts merely to increase sales volume during market downturnsInstead, he underscores the importance of maintaining the brand’s value and product quality, as these attributes constitute the essence of Porsche’s brand identity.

"Irrespective of market volatility and the rise of electrification and smart technology," Pollich asserts, "Porsche will uphold its core advantages." He emphasizes the critical role of delivering exceptional driving experiences known for durability and high performanceCrafting an appealing, fast electric vehicle can be straightforward, but achieving superior performance on tracks with consistent stability represents a different challenge altogether.

Porsche’s strength lies in its engineering legacy, and under Pollich's leadership, the brand is looking to mesh digital advancements with its DNAFor instance, innovations in navigation could include features that provide real-time climate updates or driving suggestionsPollich mentions examples where a virtual image of former F1 champion and Porsche ambassador Mark Webber could guide drivers on handling techniques at junctions or suggest precise turning and braking methods during track conditions.

Furthermore, as Porsche navigates the intertwined realms of electrification and smart technology, it aims to integrate these advancements without straying from its brand ethosThe focus remains on adhering to its characteristics that have made it synonymous with performance and driving pleasure. "If we lose sight of our core attributes while embracing digitalization, we dilute our brand's unique identity," Pollich warns, advocating for a balanced outlook as the sector evolves.

As Porsche maintains its commitment to quality, Pollich is also concentrating on optimizing the network of dealerships as part of their strategy to enhance productivity

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