December 18, 2008 - Porsche, Frankfurt Germany

Porsche sees sales falling in fiscal 2009

Germany's Porsche Automobil Holding SE expects its car sales to decline in the fiscal year 2008/09 as the global economic crisis hurts demand around the world.

"Throughout the world, the portents of a severe breakdown in demand in the automotive industry are unmistakable," the company said on Thursday.

The sports car maker did not provide a more specific outlook as future business was difficult to calculate, especially in the United States, Porsche's largest market.

In the first four months of its fiscal year, revenue fell 9.7 percent to 2.15 billion euros ($3.1 billion), while unit sales were down 18.7 percent at 25,016 vehicles.

Porsche shares had risen 4.3 percent to 50.45 euros by 1521 GMT, while the DJ Stoxx car sector index was up 2.8 percent.

Car sales around the world have fallen dramatically as the global crisis has gathered steam. European new car sales fell 25.8 percent year-on-year in November, the seventh consecutive monthly drop, according to car manufacturers' group ACEA.

Porsche is counting on the launch next year of its first four-door sports car, the Panamera GT, to fuel growth.

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A number of German carmakers have cut output levels towards the end of the year to offset slumping demand, and Porsche has followed suit, shutting its Zuffenhausen plant for eight days.

The company said it would continue responding to weaker demand with production cuts rather than selling cars at a discount. It scaled back production by 13 percent in the first four months.

Its operating profit was also below the year-earlier level in the period, though earnings from share option transactions rose due to the high price of Volkswagen (VOWG.DE: Quote, Profile, Research, Stock Buzz) shares.

In its 2007/08 fiscal year, Porsche's earnings before tax rose by nearly half to 8.57 billion euros, surpassing revenue growth thanks to higher-than-expected gains from Volkswagen stock hedges, it said last month.

Porsche has raised its overall stake in VW's voting stock to 42.6 percent, and has said it planned to increase this to 75 percent sometime next year.

The company said while it was still committed to increasing its holding in Volkswagen, this depended on the right economic conditions and VW's share price.

It could buy shares at prices above the range of 200 euros to 250 euros a share it previously indicated.

Volkswagen's shares are trading just above 300 euros, but a massive short squeeze in late October briefly made VW the world's most valuable company, when its share price rocketed to just over 1,000 euros from 210 euros in two trading sessions.

"Porsche SE is keeping all of its options open with regard to the extent, timing and implementation of the further increase of its stake," Porsche said.

The company's holdings of cash-settled options in Volkswagen have declined to 28.1 percent of Volkswagen voting rights from 31.5 percent.

Porsche said it would decide on further changes in the amount of options it holds "after careful consideration."

Original Story - Reuters