(Bloomberg) — Porsche AG is considering cost-cutting and overhauling its model lineup after a slump in sales of its sports cars in China sent profits down.

Subdued global demand for electric vehicles is another reason for the review, according to CFO Lutz Meschke, who said the third quarter was the weakest in 2024. The German manufacturer is sticking to its full-year guidance and betting that demand will recover in the final part of the year months.

Earlier on Friday, Mercedes-Benz Group AG also said it plans to cut costs further in response to the slowdown in China it is also experiencing.

A sharp decline in Chinese sales and weak demand for electric cars in Europe have caused a wave of profit warnings recently from automakers including Porsche and its parent Volkswagen AG. German carmakers are particularly struggling in Asia’s biggest economy, where consumers are reining in spending and opting for vehicles with better technology.

Porsche’s third-quarter unit shipments in China fell to their lowest level in a decade. That left operating profit for the first nine months of 2024 down 27% from a year earlier to 4.04 billion euros ($4.4 billion), Porsche said on Friday. Revenue fell by 5% to 28.6 billion euros in the same period.

Porsche cut its annual guidance in July, saying it expected a return on sales of as high as 15%.

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