Porsche will break ground Tuesday on a 500-million euro ($689 million) expansion at its factory in Leipzig. The addition of paint and body shops will nearly double investment at the plant, home to the manufacturer’s two best-selling models, the Panamera four-door coupe and the Cayenne SUV. Hit the jump to read the rest of the story.
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The plant is being expanded to prepare for output of the automaker’s small Cajun SUV, which will be be the fifth model in Porsche’s lineup. Production is expected to begin in 2013.
The investment, aimed at taking advantage of lower wages in the east, is part of a broader shift by German carmakers 22 years after the fall of the Berlin Wall. Porsche, BMW AG and Daimler AG are expanding factories in the former-communist region to escape the costs and congestion in the industrial southwest, where they all call home.
“There was nothing but green fields when we started out here,” Siegfried Buelow, head of Porsche’s Leipzig factory, said in an interview. “We have excellent conditions in Leipzig. We’re well aware of our advantages here,” said the executive, who joined the company in 2000 when construction of the plant started. The Leipzig facility is the company’s only assembly plant outside its home state of Baden-Wuerttemberg. Its current products, the Panamera and Cayenne, accounted for three quarters of Porsche’s 10,560 global sales last month.
