Leipzig, Germany - German luxury carmaker Porsche began manufacturing its Panamera four-door car Tuesday at its factory in Leipzig, Germany.

The company, based in Stuttgart, said it has spent 1 billion euros (1.4 billion dollars) developing the completely new model, which goes on sale alongside its two sports-car models and its hulking Cayenne sports utility vehicle.

The low-slung Panamera is aimed at rich people who want sports-car handling and style while carrying back-seat passengers, and is seen as competing mainly with premium BMW and Mercedes-Benz cars.

Porsche said it expects to manufacture 20,000 Panamera cars per year. The model goes on sale in September in Germany.

A senior executive, Michael Macht, said orders for the Panamera were "higher than expected" but declined to give figures.

Sales of premium cars in Germany have slumped as consumers have been wounded by the recession. Macht said world sales of the Cayenne were currently off by 20 to 25 per cent. Volkswagen makes the body shells for both the Panamera and Cayenne.

"A crisis is an opportunity," said Macht. "We see this as the right car coming at the right time."

There was no word during the assembly line launch about Porsche's fate after last year's cheeky attempt to take over Volkswagen went awry. But on the stock markets, Porsche appeared to score a paper win with Volkswagen shares suddenly climbing 12 per cent in value.

Porsche obtained more than half of the voting shares in Volkswagen last year but has been unable to secure control and is instead hobbled with a reported 9 billion euros (13 billion dollars) in debt.

Volkswagen shares rose to 256 euros Tuesday afternoon, triggering speculation that someone had been caught short in a bet that the shares would decline as a consequence of Porsche's troubles.

A Porsche spokesman in Stuttgart said, "We are not active in this."

Porsche reportedly holds options on enough shares to raise its Volkswagen stake from 51 to 75 per cent. Analysts say that unwinding those options, many of which expire this month, could lead to huge losses for Porsche if the Volkswagen stock slumps.

The Porsche and Piech families who control Porsche agreed last month to seek a merger with Volkswagen. Talks are continuing. (dpa)