BERLIN (Bloomberg) -- Porsche Automobil Holding SE's supervisory board signed off on developing a smaller, cheaper SUV, which will be aimed a younger customers who can't afford the Cayenne SUV, the German brand's best-selling model.
Porsche announced the addition of its fifth model line in an statement Monday.
The small SUV has been code-named "Cajun" -- short for Cayenne Jr.
Bernhard Maier, head of sales and marketing at Porsche AG, said earlier this month that the alternatives are to develop the Cajun in-house, share a platform with another Volkswagen Group brand or use a partner.
Maier would not confirm reports that the Cajun will go into production in 2013 using the same platform as the Audi Q5 and sharing its components.
Maier said the smaller SUV would be a way for Porsche to increase revenues and "follow the growth plan of the company."
VW CEO Martin Winterkorn, who also runs Porsche's holding company, aims to almost double Porsche sales to 150,000 vehicles by 2014 and increase cooperation between the two carmakers.
Winterkorn told workers Monday in Stuttgart that Porsche will develop future platforms for VW group sports cars and luxury sedans, spokesman Dirk Erat said.
"Porsche has its ambitious agenda clearly cut out," said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler who recommends buying the stock. "Access to VW's vast technology may help them pursue their growth goals."
Porsche announced plans last week to spend 150 million euros ($197 million) to strengthen its research center near Stuttgart to expand its lineup from 38 model variants across four vehicle lines. The carmaker's deliveries, including the 55,430 euro ($72,635) Cayenne and 75,900 euro Panamera sedan, rose 8.8 percent in the last fiscal year to 81,850 vehicles.
Porsche, which Monday reported first-quarter net income of 155 million euros compared with a loss of 431 million euros a year earlier, is in the process of merging with VW, Europe's largest carmaker. Volkswagen acquired 49.9 percent Porsche AG, the company's automaking unit, after the sports car maker failed in a hostile takeover attempt for Wolfsburg-based VW.