Skoda has effectively become Volkswagen Group’s profitability standout as Porsche’s operating return on sales collapsed in 2025. The Czech automaker maintained an 8.3 percent operating return on sales, while Porsche fell from 14.1 percent in 2024 to just 1.1 percent in 2025.

Automotive analyst Matthias Schmidt described Skoda as “the new Porsche of the Group” in comments reported by Reuters. The comparison does not suggest that Skoda has become a premium brand or that it earns more per vehicle than Porsche. Instead, it highlights how sharply Porsche’s financial performance has deteriorated relative to a brand known for practical, more attainable cars.

Skoda’s steady results

Operating return on sales measures operating profit against sales revenue, making the figures broadly comparable between the two Volkswagen Group brands. Skoda’s 8.3 percent result matched its 2024 performance and came alongside record revenue, record operating profit, and more than one million deliveries.

The brand’s lineup includes high-volume models such as the Octavia and Superb, along with the Kodiaq. Skoda has also expanded its range of more affordable electric vehicles. That mix has helped it deliver consistent returns without relying on the high prices or luxury positioning associated with Porsche.

Why Porsche’s profitability fell

Porsche’s 1.1 percent return was weighed down by extraordinary expenses of approximately 3.9 billion euros in 2025. As a result, the figure should not be treated as a normal long-term measure of the sports-car maker’s earning power.

The company is also facing weaker demand in China, stronger competition, added costs from tariffs, and difficulties in its transition to electric vehicles. Porsche is responding with a “value over volume” strategy that emphasizes higher-margin vehicles instead of pursuing sales growth at any cost.

For 2026, Porsche expects its operating return on sales to recover to between 5.5 and 7.5 percent. That would represent a significant improvement, but it would still remain below Skoda’s 2025 result if both brands meet their targets.

What the reversal means for Volkswagen Group

Porsche remains one of Volkswagen Group’s most important brands, with the 911 providing a globally recognized halo and the company retaining substantial potential to recover. However, its former role as the Group’s dependable profit engine has been interrupted by product-strategy changes, electric-vehicle investment, weaker Chinese demand, and broader pressure in the luxury market.

Skoda’s performance offers a contrasting formula: sell practical vehicles at attainable prices, maintain strong volume, and protect operating returns. A Skoda Superb is not a Porsche Panamera, and a Kodiaq is not a Cayenne, but the financial comparison shows how effectively the Czech brand is executing its existing business model.

Skoda does not need to become a premium marque to matter more inside Volkswagen Group. Its consistent results have made it the Group’s current operating-profitability benchmark, while Porsche works to rebuild the margins that once defined its contribution.