Porsche Panamera Body to be Built by VW

Press Release

Porsche investing 120 million euros and creating more than 2,000 jobs

The Board of Management of Dr. Ing. h.c. F. Porsche AG, Stuttgart, Germany, has taken the decision to build the four-door Panamera at the Company's Leipzig Plant. To build the Panamera, which is currently under development and is scheduled to enter the market in 2009, in Leipzig, Porsche will be expanding the Plant significantly. The plans involve construction of a new Production Hall with an area of approximately 25,000 square metres or 269,000 square feet and, at the same time, the extension of the existing Assembly Hall by the addition of a Pilot and Analysis Centre as well as a Workshop for Apprentice Training. A Logistics Centre covering an overall area of 30,000 square metres or 323,000 square feet will also be built in the direct vicinity of the new Hall. Subject to approval by the authorities, construction is to start this September. The overall investment in new buildings and production facilities amounts to 120 million Euros.

In the words of Dr. Wendelin Wiedeking, the President and Chief Executive Officer of Porsche AG: "Right from the beginning in the production of the Cayenne and the Carrera GT, our Leipzig Plant has proven impressively that it is in a position to build premium cars of the highest quality. So taking this decision in favour of Leipzig is a clear sign of confidence in the skills and abilities of our workforce at the Plant, and at the same time a further contribution to the economic development of the New States of Germany in the East." In Wiedeking's words, the "Made in Germany" stamp of quality is also of particular significance to the Panamera: "Making this pledge to Germany as a centre of industry, we are enhancing the inherent value of our sports cars – and at the same time we are meeting the expectations of our customers", emphasises Porsche's President and CEO.

Again, Porsche is waiving its entitlement to subsidies: "The success of our Cayenne Sports Utility Vehicle proves that we do not have to use public money in order to build our cars. Rather, what counts in our case is to build the car economically in a well-conceived production concept and with the high standard of quality that characterises our Company", states Porsche's CEO in explaining the decision.

While the engines of the Panamera will be built in Porsche's main plant in Stuttgart-Zuffenhausen, the Volkswagen Plant in Hanover will supply the painted bodies. Wiedeking: "We have decided in favour of the Hanover Plant because it is one of the most modern plants within the entire Volkswagen Group and is in a position to build the body of the car with the premium quality we require. A further advantage is that the Paintshop in Hanover allows a wider range of colours than at other VW plants." The Management and Works Council of the Hanover Plant, stated Wiedeking, agreed with Porsche that Hanover stood for top quality and maximum efficiency, and was therefore fully competitive and fit for the future. Porsche, he added, had already been able to verify these qualities in the past, with Porsche Consulting, the Company's in-house consulting specialist, having supported and consulted Hanover in the introduction of lean production processes.

In all, the degree of in-house production of the Panamera in Porsche's own plants is 15 per cent, with the painted body accounting for six per cent of the car's entire value. But since the Company cooperates largely with German suppliers, approximately 70 per cent of the car's value creation will be in Germany. Like Porsche's other models, the Panamera is therefore a genuine Porsche product "Made in Germany".

Production of Porsche's four-seater Sports Coupé also benefits the labour market, with some 600 new jobs being created at Porsche Leipzig GmbH and another 600 with suppliers in the region. Recruitment of these new employees will start in 2008. At Porsche's Plants in Stuttgart-Zuffenhausen and Weissach the Panamera will not only help to secure existing jobs, but will also create approximately 400 new jobs by 2009. And at the VW Plant in Hanover the assignment by Porsche means the long-term assurance of some 500 jobs.

Furthermore, the Porsche Executive Board has reached an agreement with the Works Council of the Porsche AG Group, the Works Council of Porsche Leipzig GmbH and the IG Metall union to extend the company collective pay agreement for Porsche Leipzig GmbH for an additional five years.