(Yicai) Dec. 18 -- The Chinese headquarters of German luxury automaker Porsche is reportedly letting go 10 percent of its staff.

Porsche China is optimizing costs at various departments and projects, reorganizing its structure, and cutting human resources, administrative, travel, and training expenses to maintain sustainable growth in the fast-changing Chinese automotive market, The Paper reported today, citing employees.

On Dec. 4, the Stuttgart-based carmaker announced that it would establish a new technical division to coordinate its research and development efforts in China and promote the deep integration of technological innovation and localized strategies to further enhance the local adaptability of products and services.

Porsche appointed Li Nan, who previously held senior positions at Mercedes-Benz, as the vice president of the Technical Division, reporting directly to Porsche China’s President and Chief Executive Officer Alexander Pollich.

Porsche has encountered great growth pressure in China in recent years. In 2023, it delivered 320,221 cars globally, up 3.3 percent from the previous years. However, its deliveries in China plunged 15 percent to 79,283 units in the period, with the decline widening to 29 percent in the first three quarters of this year to 43,280 units.

The main reasons for Porsche’s sluggish performance in the Chinese market are the long-lasting price war, quick electrification, and intelligent transformation. The firm has only two pure electric vehicles in China, the Macan EV and Taycan, which are far behind local competitors in terms of intelligence.

During Porsche’s third-quarter earnings conference call, Chief Financial Officer Lutz Meschke said that Porsche would “significantly streamline its dealer network in China.”

Editor: Futura Costaglione