Porsche AG and Volkswagen AG will build their new jointly developed sport-utilities in separate plants. VW will build its off-roader at a plant in the Slovak capital of Bratislava. Porsche will produce its version at a new factory in the eastern German city of Leipzig.
The two models will have a common platform but different styling. They are scheduled to go on sale under separate brand names in 2002.
Staff Reporter Dorothee Ostle of Automotive News Europe talked with Porsche CEO Wendelin Wiedeking about the decision to build the two sport-utilities in different locations.
Why did you decide to build the Porsche sport-utility in Leipzig when Volkswagen chose Bratislava?
For image and cost-efficiency reasons we always intended to build the new Porsche SUV in Western Europe. We chose Leipzig mainly because of its excellent position in the transport logistics structure. The factory has to work with many other locations, such as the plants in VW's production network, Porsche's system suppliers - who are mostly in Germany - the seaports of Emden and Bremerhaven, and our own main plant in Zuffenhausen.
What priority did you place on the image of the production site in the eyes of American customers?
The image factor naturally played a decisive part in our choosing this location. It not only matches our premium product claim but also helps to enhance the social acceptance of our sports cars and our brand image. For Porsche, 'made in Germany' is a crucial competitive factor. It is important for all Porsche vehicles - the Boxster, the 911 and our new SUV - to be clearly associated with Germany as their country of origin by people all over the world. Our most important market in the future will continue to be North America, where high-quality Ger-man workmanship still enjoys a very good reputation.
Was a location in Western Europe a condition for joint production with Volkswagen?
The two parties allowed themselves plenty of time to decide where the vehicles should be built. We knew Volkswagen's preferences, but these did not fit completely with our own. Nonetheless, we realized that we would have to reach an agreement in a way that both parties would find satisfactory. I am convinced that in Leipzig - with its position in VW's highly-effective production network - and with our main plant in Zuffenhausen, which will deliver the engines, we have found the most satisfactory solution for Porsche.
What is the extra cost in investment and logistics by establishing a separate Porsche production site rather than using a common production line?
We had to make sure that the cost situation was correct before we made this decision. We want to produce our new vehicle at optimum cost and sell it on the international market at a competitive price. Leipzig is not only of interest to Porsche for image reasons but also from an economic standpoint.
The additional cost burden compared with Bratislava, where costs are lower, is more than compensated for by the greater added value we achieve in Leipzig - if only because manufacturing in Germany justifies a different pricing policy for our new product. In short, Leipzig is more attractive for Porsche than Bratislava in economic terms.
If you had to invest in new production, why did you choose Leipzig and not the Stuttgart area or Valmet in Finland, where you now build Boxsters?
In recent years, our main plant in Zuffenhausen (near Stuttgart) has reached the limits of its capacity. We simply do not have the space to grow any further there. But Zuffenhausen will benefit very strongly from our SUV because it will build and supply its engines. Finland was ruled out mainly because of the transport logistics situation, since it is well away from the direct line between Bratislava and the seaports in Emden and Bremerhaven.
You plan a volume of 20,000 Porsche SUVs a year. If demand exceeds that figure, how much can you increase capacity in Leipzig?
We will have some room to maneuver in Leipzig if demand is higher than we anticipate. At the moment, we expect to sell more than 20,000 vehicles a year worldwide, but we will organize the new plant so that we can respond to customer needs. We want delivery times for our SUV to remain within acceptable limits.
You have always been strictly against government subsidies and benefits for the car industry. But could you apply for some in Leipzig? Will you? Will you benefit directly or indirectly from tax reductions or exemptions in Leipzig?
We have never made any secret of the fact that we are opposed to subsidies for the automobile industry. For this reason we did not make our decision in favor of Leipzig dependent on receiving a subsidy from the State of Saxony, nor do we have any plans to do this in the future. As far as the site for our new plant is concerned, the normal market conditions apply.
How much money could you save if you applied for maximum benefits and do your shareholders agree with this policy of not asking for benefits?
In Porsche's opinion, selling luxury products and demanding financial aid at the same time simply don't go together. The company's shareholders accept that view. On this question we have taken a determined and unequivocal line that matches our conception of Porsche and its values. I am quite sure that when all things are considered, this attitude will benefit us in the long run.