Porsche has launched a cost-cutting programme to counter the effect of a strong euro and a fall in sales of its 911 and Boxster, the manufacturer’s chief executive, Wendelin Wiedeking, says.

Porsche has launched a cost-cutting programme to counter the effect of a strong euro and a fall in sales of its 911 and Boxster, the Zuffenhausen-based manufacturer’s chief executive, Wendelin Wiedeking, says.

Speaking at the recent launch its 911 4S cabriolet, Wiedeking said the euro's appreciation against the dollar and rising research and development costs had forced the company to reduce per-unit production costs by up to 10 per cent.

To make matters worse for Porsche, sales of its 911 plunged 40 per cent in February in the US alone.

"Porsche's R&D costs have risen drastically over the past years and we are losing volumes, albeit from a high level," the German said. "There is a necessity to act so we will look at the cost structures, first of the Cayenne, but then also of our next sportscar generations."

In the first nine months to April 30, worldwide sales of the Boxster and 911 fell 9,2 per cent. Although US sales have recovered since February, US sales of the 911 were still down 16 per cent in April.

"It is absolutely wrong and short-sighted to declare a crisis just because of falling sales," Wiedeking added. "Nevertheless, we must do everything to stabilise our profitability now."

Wiedeking said recently Porsche would comb through its suppliers, materials, and organisational and engineering structures to cut costs. The same would be done ahead of the new model launches of the 911 and the Boxster, which are expected for 2004 and 2005, respectively.

Wiedeking said cuts to unit cost would "definitely be more than five per cent" but below 10 per cent.