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Porsche to Build Plant in Germany for SUVs

19 September 1999

Output Expected to Exceed 20,000 Units Per Year

    ATLANTA -- Porsche AG today announced plans to build a new plant in 
Germany dedicated to the assembly of the forthcoming Porsche sport utility vehicle.

    "As a manufacturer of exclusive, premium sportscars, we will continue to
rely on the high quality work implied by the term 'Made in Germany.'
Throughout the world, all Porsche products are clearly associated with Germany
as their country of origin.  For us, this is a most significant factor, which
enhances the acceptance of our product and boosts our brand image," said Dr.
Wendelin Wiedeking, Chairman of the Porsche AG Board of Management.

    To be located in Leipzig (in the former East Germany), the new plant will
be part of a production network comprising the main Porsche factory in
Stuttgart-Zuffenhausen (Germany) and VW plants in Bratislava (Slovakia),
Braunschweig (Germany) and Hanover/Wolfsburg (Germany).

    Sheet metal pressings for the new sport utility vehicle will come from
Hanover or Wolfsburg, axle and suspension components from Braunschweig, and
the body shell will be built in Bratislava.  Many of the other components for
the Porsche SUV will be manufactured by suppliers in Germany.

    The heart of the SUV, its engine, will be produced in Zuffenhausen, where
engines are currently produced for all other Porsche models.

    The production network concept involving the Leipzig and Zuffenhausen
facilities and various VW plants also offers Porsche the opportunity to
produce its new sport utility vehicle within an optimum cost framework and on
competitive terms in the international market.

    The geographic location of Leipzig (in the German Federal State of Saxony)
offers Porsche easy access to the seaports of Emdem and Bremerhaven, an
important factor given that two thirds of SUV production will be exported,
much of it to the North American market.  In addition, Leipzig is centrally
located among the other plants to which its production in linked.

    Construction of the new Porsche Leipzig factory is scheduled to begin in
the autumn of this year, with the first vehicles due to leave the assembly
line by the end of 2001.  The Stuttgart based company will invest some
100 million German Marks in the facility that will employ 260 workers.  Output
for the new plant will be at least 20,000 units.

    Porsche announced in July that in addition to its current Boxster and 911
model lines it was planning to manufacture and sell a sport utility vehicle
with permanent four-wheel drive.  Porsche is confident the expanding SUV
market will increase its opportunity for further economic growth.

    Porsche will invested more that one billion German Marks in the Project.  
The platform for the new vehicle will be shared with Volkswagen AG, though the 
two products will be entirely different in character.  Porsche is leading development 
work for the platform at its research and development center in Weissach, Germany, 
where the project has created new jobs for 300 highly qualified engineers.