Porsche admits recession will affect business

It might have beaten the hedge funds at their own game, briefly made VW the most valuable company in the world and announced the most successful year in the company's history, but family-owned Porsche cannot escape the worldwide recession.

On the day it announced that it had set new records with profit, turnover, sales and production figures reaching all-time highs in the year 2007/8, it also admitted that it expects a significant drop in sales in 2008/09.

"The signs of a severe decrease in demand in the automotive industry are unmistakable the world over, and it is virtually impossible to calculate further developments particularly in the US, Porsche's largest single market," read a statement.

The Germany-based company acknowledged that it would be unable to escape this downward trend, which has already hit revenue and sales figures in the third and fourth quarters of 2008.

Production will be scaled down to reflect demand in the market but the company is banking on an upturn in business next year when it launches the four-door, four-seater Panamera Gran Turismo.

The extent to which the luxury car manufacturer benefited from cash settled share option transactions in VW, which pushed the Porsche and Piech families' ownership in VW to 74.1%, was also acknowledged.

Increased development costs incurred were more than off set by the positive effects of the VW share acquisition to the tune of €6.8 billion according to the statement.

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