Berlin: Volkswagen's controlling family shareholders piled pressure on the automaker to overhaul its business model on Wednesday after the German company's ongoing problems led to a drop in first-quarter profit at their ⁠holding group.

Porsche SE, the holding company of the Porsche-Piech auto dynasty and Volkswagen's largest investor, posted a 21% drop in adjusted profit after tax of 382 million euros ($469 million) for the January-March period.

Porsche SE's ‌unadjusted result after tax was a 923 million euro loss due to a 1.3 billion euro non-cash writedown on its Volkswagen stake, after a 1.1 ‌billion euro loss last year.

Porsche SE is looking ‌to defence and artificial intelligence investments as its core automotive holdings ‌suffer from falling profits in a ‌global market under fire from tariffs, Chinese competition and a troubled transition to electric vehicles.

Such investments are still a ‌small part of the portfolio at Porsche SE, which said ⁠it generated proceeds of 60 million euros in the first quarter from the sale of its stake in semiconductor startup Celestial AI.

PUSH FOR 'REALIGNMENT'

Porsche SE's results were ⁠in line with expectations, ⁠its board chairman Hans Dieter Poetsch said in a statement.

"At the same time, the business models that have served our core investments well for ⁠a long time now need to be realigned," Poetsch added in reference to Volkswagen and its Porsche AG subsidiary.

Porsche SE owns 31.9% of Volkswagen shares and 53.3% of voting rights and 12.5% of sportscar maker Porsche AG.

Poetsch has previously voiced Porsche SE's commitment to Volkswagen, but ‌pushed it to find savings. Volkswagen CEO Oliver Blume has vowed to ramp up cost-cutting further on top of 50,000 job cuts under way, with under-used plants in Germany under the spotlight despite a 2024 deal with unions guaranteeing no plant closures this decade.

Volkswagen controlling families demand overhaul after dent to profit