Leipzig is Porsche's Crown Jewel

Three years after announcing plans to build a new assembly plant in this small former communist East German town, Porsche AG launches production of its new Cayenne cross/utility vehicle.

The auto maker invested E127 million ($123 million) in the facility — its first greenfield plant, marking a new chapter in Porsche's product history that tests unchartered waters.

Porsche's Zuffenhausen plant, a former sawmill, was home for production of the first Porsche, the 356 No.1, in 1948. Production of the Boxster roadster comes courtesy of Valmet Automotive's specialty manufacturing plant in Uusikaupunki, Finland. The plant also produces the Saab 9-3 hatchback and 9-3 convertible.

“Here in Leipzig, the smallest independent automobile manufacturer in the world is about to move forward in an entirely new direction,” says Porsche AG President and CEO Wendelin Wiedeking, at the new plant's dedication.

Production of the Cayenne, which goes on sale in Europe in December and the U.S. in February, will be joined by the upcoming Carrera GT high-performance sports car, slated to begin production at Leipzig in the second half of 2003.

Porsche plans to produce 25,000 units of the Cayenne annually at the plant, while the Carrera GT will be limited to approximately 1,000 units over the vehicle's life cycle.

The Leipzig assembly facility, measuring a total 195,903 sq. ft. (18,200 sq. m), is expected to be Porsche's krownjuwelen (crown jewel). It sits on 494 acres of land just 289 miles (466 km) from Porsche's famed Stuttgart-Zuffenhausen assembly plant, where the 911 is produced and where the Cayenne's V-8 engine is assembled and shipped via rail to Leipzig.

Cayenne's assembly operation requires 300 workers, while another 70 will be added for production of the Carrera GT. The new plant leverages modular and synchronous assembly processes to help reduce inventory and overall capital investment.

The L-shaped, single-floor factory is flanked by loading docks used for the delivery of more than 20 large subassemblies provided by more than 300 subcontractors.

Just as the engines are made outside Leipzig's boundaries, Cayenne's painted exterior body panels are shipped from Volkswagen AG's Bratislava assembly plant in Slovakia. This makes sense, since Porsche and VW shared development of the Cayenne and VW's version, the Touareg.

To help adhere to strict quality standards, several Porsche engineers monitor the Bratislava paint and stamping operations, while other engineers monitor assemblage of subassemblies arriving from suppliers.

“We use a great deal more modules for Leipzig than we do at our Zuffenhausen plant,” says Michael Macht, executive vice president of production and logistics at Porsche. “Leipzig is an ideal location (within close proximity) to our suppliers.”

Macht says Porsche plans to operate Leipzig's Cayenne output on two shifts, with the ability to add further capacity via a third shift if necessary. “We can step up output by at least 30% to 40% without adding on to the factory,” he says.

In keeping with Porsche's conservative financial policies, the Leipzig plant will be profitable from the start of Cayenne production. “Our fixed costs are being kept to a minimum,” Wiedeking says. “We have already paid off our research and development expenditures (on Cayenne). It will be making money right from the start.”

In addition to the production facility, Leipzig also is home to a modern Customer Center that can be used for delivery of Porsche vehicles directly to customers, as well as for private functions.

The 5-story customer center resembles a flying saucer and can be viewed from the neighboring highway. Measuring 30,752 sq. ft. (2,857 sq. m), the center provides an ideal viewing platform for the six miles (9.75 km) of off-road and paved test tracks housed at the site.

The test track has been certified by the Federation Internationale de l'Automobile (FIA) racing body and could become the home of a future Formula One race, according to Porsche sources.

Sections of the test track are modeled after some of the most cherished turns and curves found at racetracks throughout the world, including Laguna Seca in California and the renowned Nurburgring in Germany.

The off-road course, designed to show the capabilities of the Cayenne, includes ditch crossings, water and sand pits. Since most of the land used in the off-road course once was part of a training facility for Russian and East German armies, Porsche decided to use some of the former bunkers as special ramps and inclines.

Porsche expects 20,000 to 30,000 guests to visit the Customer Center facility annually, while 3,500 Porsche owners are expected to take delivery of their cars and CUVs at the facility each year.