Porsche has dominated out constructing a manufacturing unit in China, its largest and most worthwhile market, regardless of struggling to ship sufficient German-made sports activities vehicles to satisfy a surge in Asian demand on the finish of final yr.

“It’s a high quality and a premium argument nonetheless to provide from Europe for China,” chief govt Oliver Blume advised the Monetary Instances. “Right this moment it doesn’t make any sense [to move production].”

Blume’s place stands in sharp distinction to different premium German manufacturers, together with Audi, BMW and Mercedes, that more and more manufacture vehicles for the Chinese language market domestically, usually by means of joint ventures.

Final yr, Daimler boss Ola Kallenius advised the FT that the Stuttgart-based firm would now not broaden its manufacturing in Germany, the place labour prices are excessive, and would put money into China as a substitute.

However Blume, who additionally sits on the board of Porsche’s mum or dad firm Volkswagen, stated it was price absorbing greater prices for the cachet of the “Made in Germany” model.

“That’s additionally the suggestions we acquired from our dealerships and from our prospects,” he stated.

Porsche, which accounts for about 40 per cent of VW Group’s annual earnings, is more and more reliant on China.

“It was solely 10 years in the past when Porsche was promoting lower than 100,000 items globally,” stated Arndt Ellinghorst, an analyst at Bernstein. “It now sells almost 90,000 items in China alone.”

The nation, which accounts for a couple of third of Porsche’s gross sales, was the one huge market wherein the corporate registered development throughout a pandemic-ravaged 2020.

However whereas the Stuttgart-based carmaker’s gross sales in China grew by 3 per cent final yr, sister model Audi loved a 5.4 per cent rise, whereas BMW delivered 7.4 per cent extra vehicles and Mercedes 11.7 per cent.

The premium market was creating a lot faster [than expected in China] and we weren’t capable of to observe as a result of 100 per cent of our manufacturing comes from Europe,” Blume defined.

However, he stated, because of this Porsche was capable of preserve extra secure costs, whereas rivals with manufacturing websites in China supplied heavy reductions to incentivise gross sales.

The previous engineer additionally stated Porsche, which has six mannequin ranges and offered 272,000 vehicles in complete final yr, didn’t have ample volumes to justify localising manufacturing in China.

Whereas Porsche does manufacture one in every of its fashions in Slovakia, the corporate’s electrical ambitions are firmly rooted in Germany.

Its Porsche Taycan — designed to compete with Tesla’s Mannequin S — is produced in the identical manufacturing unit as its emblematic 911 mannequin at firm headquarters in Zuffenhausen, a northern district of Stuttgart.

Blume stated this determination despatched asturdy sign” to prospects that the automobile, which offered 20,000 items final yr, was “engineered and made in Germany”.

Nevertheless, whereas he maintained {that a} European base was a “win-win state of affairs” for Porsche and a “sturdy sign for funding” within the area, he stated market forces might change the group’s international footprint sooner or later.

“In 10 years, I do not know,” he stated. “It relies upon lots on how quantity develops and in addition the laws in every nation.”