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Porsche looks into assembly at VW plant

Wolfsburg could make bodies and paint the Porsche Panamera

Stuttgart/Wolfsburg. Porsche's plans to boost its stake in Volkswagen to 20 percent of its common shares, involve much more than an equity investment.

Automobilwoche has learned from management-level sources that Porsche CEO Wendelin Wiedeking is considering handing over painting and body construction for the Panamera luxury coupe to VW. The model line is due in 2009.

Since 2002 Porsche has had its Cayenne SUV line built at VW's Bratislava plant in Slovakia alongside the Touareg SUV.

VW's main factory at Wolfsburg has the best chance for the assignment.

But Wiedeking said Porsche would "put the Panamera onto the street under its own initiative."

It plans to develop its own platform and forego cooperation with other manufacturers.

But to assure the Panamera's profitability, there would be "closer cooperation with selected systems providers" than there has been in the past, he said.

A source in VW CEO Bernd Pischetsrieder's circles said this "in no way prevents us from doing business with Porsche on the Panamera."

A member of the VW board takes a similar position.

"We haven't officially broached this on the panel, but VW would gladly take on body construction and painting for the new Porsche line."

Assigning an appropriate amount of work to Wolfsburg would help VW use its capacity there more fully.

Wolfsburg is VW's most expensive production location. But Porsche could be accommodated "with especially favorable pricing for contract manufacturing," a highly-placed executive said. "That is because capacity that is lying fallow would be much more expensive for us."

Porsche would also benefit by avoiding expensive investment in new body and paint facilities.

Porsche plans to handle final assembly of the four-door Panamera at its Leipzig factory, where Porsche finishes the assembly of the Cayenne. The approval process for a factory expansion has been concluded.

A VW project developer also sees plants at Mosel, Germany, and Setubal, Portugal, as possibilities.

"But if a deal comes together, the works council will massively back Wolfsburg," he said.

VW's senior executives were scheduled to discuss the consequences of the Porsche investment at a special meeting on Monday, October 10.

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