PORSCHE has opened a new factory to build its Cayenne sport utility vehicle in Leipzig, in eastern Germany.

The 127 million Euro plant, officially opened by German Chancellor Gerhard Schroder, will produce up to 25,000 vehicles a year.

The ceremony was the first official unveiling of the car and Porsche chief executive Dr Wendelin Wiedeking said: 'Here in Leipzig the smallest independent automobile manufacturer in the world is about to move forward in an entirely new dimension.'

The ceremony was completed by the symbolic tightening of the final screw on the first Cayenne by Chancellor Schroder.