Dec. 6 (Bloomberg) -- Porsche AG, maker of the 911 sports car, expects sales growth to stagnate for the next two years as the company develops a four-door model and demand for the Cayenne sport-utility vehicle falls.

Porsche's next ``main thrust'' of expansion will start in 2009, when the Panamera model goes on sale, Chief Executive Officer Wendelin Wiedeking said today in a statement. Sales in the first four months of the current fiscal year rose 0.7 percent to 2.05 billion euros ($2.7 billion).

``Investors are used to very strong profit growth over the past few years,'' said Stephen Cheetham, an analyst at Sanford Bernstein in London. ``We're looking at a holding pattern until the Panamera comes out in 2009.''

Wiedeking almost doubled net income to a record 1.39 billion euros in the year through July, helped by sales of the new Cayman sports car and the $122,900 turbo-charged 911. Sales sank 18 percent in North America, the largest market for Stuttgart, Germany-based Porsche, in the four months ended Nov. 30, mainly as a result of plummeting demand for the Cayenne.

``It will not be possible to keep the company's profits at this high level,'' Wiedeking said. ``In all likelihood, we will show the same operative result as in the previous year. But a quantum leap of the kind we saw last year will not repeat itself.'' Profit last year was helped by one-time gains, including the sale of a division.

The shares rose 3.5 euros, or 0.4 percent, to 895 euros in Frankfurt. The stock has risen 47 percent this year.

Volkswagen Shares

Wiedeking unexpectedly bought shares in Volkswagen, Europe's largest carmaker, in September 2005 to protect Porsche's biggest supplier from a possible takeover. Porsche on Nov. 15 said that the supervisory board authorized increasing the stake to 29.9 percent from the current 27.4 percent and that the company aims to increase common and preferred stock by 8.75 million shares, or 50 percent.

The 27.4 percent stake includes Porsche's direct holding in Volkswagen as well as any indirect stakes owned by the Porsche or Piech families, Chief Financial Officer Holger Haerter said. Porsche is in ``no hurry'' to raise the stake.

Porsche has spent more than 4 billion euros so far buying shares in Volkswagen. Wiedeking is also looking for an additional seat on Volkswagen's supervisory board, increasing the number to three, he said, declining to identify who might fill the position. Wiedeking and Haerter sit on the Volkswagen board.

``Acquiring a share in Volkswagen, Porsche has become another company,'' Wiedeking said. ``We have come out of our warm comfort zone. Without doubt, this involves risk.''

Audi Spinoff

Wiedeking dismissed speculation that Porsche plans to spin off Audi from Volkswagen and establish a larger luxury carmaker with Volkswagen's luxury brands.

``Audi lives within the total system of Volkswagen and bringing it our of there wouldn't make sense,'' he said. ``When Audi is successful, then we are also successful.''

There are no plans at the moment to completely takeover Volkswagen, Wiedeking said, without ruling out the possibility when asked by a journalist during a press conference.

Porsche is protected against currency fluctuations for the next six years, said Haerter in an interview. The contribution of hedging to earnings last year was at least 100 million euros, he said, without being more specific. The hedging rates have worsened recently with the decline of the dollar.

The euro has risen 12 percent against the dollar this year, according to Bloomberg data. The dollar rose to $1.3268 against the euro at 9:54 a.m. in London from $1.3317 yesterday in New York.

Cayenne Sales

The Cayenne, whose sales dropped by almost a third in the period, helped Porsche raise earnings to records in the past three years. The SUV is the first vehicle other than a sports car that Porsche has made since shortly after World War II, when it built tractors. The Cayenne competes with Bayerische Motoren Werke AG's X5 and the Mercedes-Benz M-Class.

An updated version of the Cayenne in February will help stem the decline of the SUV, the company said. Porsche ``remains moderately confident'' about business in the current year.

Total sales in the four months ended Nov. 30 increased 0.4 percent to 25,850 vehicles.

Porsche's net income as a proportion of sales is the highest in the industry at 19 percent. That compares with 7.5 percent at Toyota Motor Corp., the world's second-biggest carmaker, for the year ended March 31, according to data compiled by Bloomberg.

``Porsche will not in any way deviate from the company's clearly profit-oriented, and not volume-oriented, business policy,'' Wiedeking said today.

Panamera Cost

The carmaker is spending 1 billion euros to develop the Panamera, which will compete with DaimlerChrysler AG's Mercedes- Benz CLS and Fiat SpA's Maserati Quattroporte. The model's body will be built at Volkswagen AG's factory in Hanover, Germany, which makes light commercial vehicles.

The Panamera will be the third model line introduced since Wiedeking took over at Porsche 12 years ago. The automaker expects to sell 20,000 Panameras annually and prototypes of the car are already being test-driven on roads in Europe, Wiedeking said.

The 911 Turbo, the most expensive of the 911-model range, starts at $122,900 in the U.S. Porsche's least expensive sports car, the Boxster, is priced at $45,000 while the Cayman costs $58,900. The Cayenne ranges in price from $42,200 to $111,600.

To contact the reporter on this story: Jeremy van Loon in Stuttgart at jvanloon@bloomberg.net.

Last Updated: December 6, 2006 12:52 EST