When Porsche decided to enter the S

When Porsche decided to enter the SUV market with its luxury Cayenne model, it surprised the auto industry by locting its new assembly plant in Leipzip, Germany. Many observers believed Porsche should locate the plant in either central or eastern Europe where labor costs were very low, or even perhaps in the US (as had Mercedes and BMW) where it coutld be close to its major market. The critical issue driving Porsche's Leipzig plant dexision appeared to be the primacy of Porsche's strategy of quality, craftsmanship, and engineering excellence. Ultimately, maintaining brand image (while, paradoxically, simultaneously upsettign ghat brand image) was much more important to Porsche than saving on labor costs-espercially when assembly costs comprise only a small portion of overall vehicle cost. In the end, Porsche emphasized design, research and technology development, and marketign to maintain its reputation for a commitment to excellence.