Porsche Struggles with Severe Supply Shortage Following Flood at Aluminum Supplier's Factory

Luxury , a German car maker Porche, says that a recent flood at a crucial European supplier's factory has left them with a "severe supply shortage" for aluminum vehicle components.

In its midyear financial report, Porsche stated that the aluminum supplier has warned its clients of a "force majeure" occurrence, which means that circumstances beyond the factory's control will prevent it from fulfilling its contractual obligations to carmakers. Porsche anticipates this disruption affecting every car it produces, and believes it may be obliged to temporarily halt production for one or more of its vehicle series in the coming weeks. According to Reuters, the aluminum scarcity has affected BMW and Mercedes-Benz as well, though both companies have apparently found other suppliers.

This comes in the midst of what Porsche refers to as "a highly challenging macroeconomic environment," following a 33% year-over-year drop in sales in China in July due to new EU tariffs on Chinese electric vehicles. Given the multiple challenges facing the automaker, Porsche reduced its financial estimate for the year in its Q2 report, with expected sales revenues falling from €40-42 billion ($43-45 billion) to €39-40 billion. The company has reduced its planned return on sales (the ratio of operating income to net sales) from 15-17% to 14-15%.