Porsche production affected by floods that could damage more than 10,000 vehicles

Porsche’s production has been affected by flooding at a supplier and some lines may even be shut down.

Porsche has cut its sales and profitability outlook after flooding at a European supplier disrupted supplies of aluminum alloy. Porsche said the supply shortage was affecting production of all its models and could lead to the shutdown of one or more vehicle series. The disruption is expected to last several weeks.
According to Bernstein analysts, the floods occurred at a Swiss supplier and could result in the suspension of production of between 10,000 and 17,400 vehicles in the second half of this year, a number equivalent to more than 11% of the company's deliveries in the first half.

As reported by Automotive News Europe, Porsche's unnamed supplier has stated that it is unable to fulfill its contractual obligations due to events beyond its control. In addition, Porsche said it will not be able to fully compensate for the resulting delays in vehicle production and deliveries during the fiscal year.
In Bernstein's view, "Porsche will certainly be questioned about its risk management, which left it so vulnerable to a critical supplier."
Previously targeting between €40 billion and €42 billion in revenue, the flooding at the critical supplier has caused Porsche to lower its outlook to between €39 billion and €40 billion in revenue.
The company expects a return on sales of between 14% and 15% for the year, down from its previous expectation of 15% to 17%.

Floods don't appear to be affecting other manufacturers
The shortage of aluminum alloys has also affected the supply chains of BMW and Mercedes, but both have managed to find alternative suppliers. Spokespeople for both companies declined to give further details.
Audi said the floods had led to a shortage of special aluminum alloys at several suppliers, but that the shortages were not directly affecting its production: "We are in close contact with our suppliers and are working to avoid any supply constraints."


Supplier that stopped Porsche production was not revealed
U.S.-based Novelis, which supplies a joint venture that makes body parts for cars and is jointly owned by Porsche, is said to have closed a plant in Switzerland due to the flooding. It did not immediately respond to a request for comment from Automotive News Europe.
Also, U.S.-listed aluminum maker Constellium, based in France, suspended operations at its Sierre and Chippis plants in Switzerland this month after severe flooding. Its customers include Porsche, Volkswagen, Stellantis, Mercedes-Benz, Ford and BMW, according to a regulatory filing. However, Constellium said it does not supply Porsche from Switzerland.