Germany's Porsche will sell its IT consulting subsidiary MHP to Tata Consultancy Services while signing a five-year AI and IT strategy agreement with the Indian company. Against a backdrop of weak EV performance, the move to carve out non-core businesses provides an example of how manufacturers are approaching the use of IT.
Porsche AG will sell its management and IT consulting subsidiary MHP to Tata Consultancy Services while entering into a five-year AI and IT strategy contract worth €1.25 billion. The transaction is reportedly valued at approximately €320 million on an enterprise-value basis, while Porsche is also reallocating cash and resources. This indicates a strategy of securing world-class IT implementation capabilities while divesting non-core operations.
The background includes a sharp decline in profit in Porsche's financial results for the fiscal year ended December 2025 and a reassessment of its EV strategy. As the profitability of its vehicle business deteriorates, including the recognition of approximately €3.9 billion in special losses and plans to cut around 3,900 jobs, Porsche has also begun reviewing how its IT functions are owned and deployed.
Tata Consultancy Services has indicated not only its acquisition of MHP as the acquiring party, but also a growth strategy that leverages its AI implementation capabilities, advancing its European expansion and strengthening its outsourcing strategy. For Porsche, it has announced plans to establish an AI Mobility Center of Excellence and use AI in engineering, manufacturing, operations and customer experience.
For Japanese companies, this points to a shift in the ownership of internal IT functions toward using external capabilities, as well as a need to reassess procurement strategies that draw on globally proven partners. It is important to strengthen core areas while appropriately divesting non-core areas and redesigning procurement structures in stages.