Porsche to leave DAX index after prolonged share decline

German luxury sports car maker Porsche AG is set to leave the group of the 40 largest companies listed on the Frankfurt Stock Exchange, included in the main DAX index, following a prolonged decline in its shares, caused by tariffs imposed by the US and reduced demand in foreign markets, according to CNBC.

Porsche CEO Oliver Blume, however, is aiming for a quick return to the Frankfurt market index.

Porsche is also in the same situation as healthcare company Sartorius, according to euronews.com.

The Stuttgart-based carmaker will be replaced in the DAX index by online sales site Scout24 SE, ISS Stoxx, a subsidiary of Deutsche Börse, announced last week. The change will come into effect on September 22nd, and Porsche will then be included in the MDAX index of mid-cap companies.

The DAX tracks the performance of the 40 largest companies listed on the Frankfurt Stock Exchange and is usually considered a barometer of the health of the German economy.

Companies that make up the index must meet certain minimum quality and profitability requirements to be included.

• Oliver Blume, Porsche CEO: "DAX is losing one of Germany's most valuable companies”

Porsche, part of the Volkswagen Group, listed on the German stock exchange at the end of September 2022 in one of the largest initial public offerings (IPOs) in German economic history. Just a few months later, the then highly profitable company was promoted to the DAX index.

The shares were listed at a price of 82.50 euros and rose to almost 120 euros in the following months. Porsche shares were trading below 45 euros on Friday, down 33 percent over the past 12 months.

Porsche CEO Oliver Blume told the Frankfurter Allgemeine Zeitung that "the DAX is losing one of Germany's most valuable companies” and vowed that the company he leads would soon regain its place.

With a market capitalization of almost 20.4 billion euros, Porsche remains one of Germany's largest listed companies. Even so, the automaker has been hit hard by U.S. tariffs on car imports and has faced weak demand for electric vehicles, prompting it to abandon plans to produce electric battery cells.

Porsche has also initiated cost-cutting measures, including layoffs. Blume says the company is undergoing a transformation, but with recent restructuring programs, he expects the shares to rise again in the future.

"Given the new direction of Porsche, we have a clear ambition to return to the DAX as soon as possible," concluded the car company's CEO.