Volkswagen Group wrote down $11.5 billion on Friday, with $6.9 billion attributed to its 75% stake in Porsche. The Stuttgart-based sports car maker has seen profits decline as China sales slowed and electric vehicle production outpaced demand, with its profit margin falling below Skoda's. VW may accelerate workforce reduction plans ahead of a challenging 2026. Mercedes-Benz also warned it might close one German assembly plant and one powertrain plant unless cost savings are achieved. Workers protested yesterday at Audi, BMW, Mercedes-Benz, Porsche, and VW facilities. IG Metall union head Christiane Benner called on corporate leaders to take responsibility for Germany's automotive industry and jobs.

Porsche has sold its consulting arm MHP to Tata Consultancy Services for approximately €320 million, then immediately signed a five-year, €1.25 billion contract to buy back similar digital and AI services from the new owner. The sale comes as Porsche faces severe financial pressure. The company's operating return on sales plummeted to 1.1% in 2025 from 14.1% the previous year. Porsche booked roughly €3.1 billion in extraordinary charges tied to delaying its next-generation EV platform and pivoting back to combustion engines. MHP generated €742 million in revenue last year, meaning it sold for less than half of annual sales. Porsche is now committed to spending nearly four times the sale price over five years for comparable services. Deliveries fell 16.5% in the first half of 2026, whilst battery-electric vehicles' share in Porsche's lineup shrank from 23.5% to 19.4%.

Porsche has signed a five-year contract worth €1.25 billion ($1.46 billion) with Tata Consultancy Services for artificial intelligence deployment. As part of the agreement, TCS will acquire Porsche's IT consulting business, MHP, for €320 million. TCS will establish a specialised hub to oversee AI implementation at the German sports-car maker. The partnership aims to combine Porsche's automotive expertise with TCS's digital and AI capabilities, according to Michael Leiters, Porsche's chairman. The deal will take effect once TCS completes the MHP acquisition, which includes around 4,500 employees. TCS reported annualised AI revenues of $2.6 billion in the June quarter, up 13.6% from the previous quarter. The MHP sale forms part of Porsche's "Sportwagenschmiede 35" strategy to improve profitability and cash flow.