German car maker Porsche is expected to announce a second consecutive year of losses. The sports car company already posted their first full-year loss up to the end of July of over 2.5 billion euros. However, the merger with Volkswagen in two years’ time will wipe out Porsche’s debt of over 11 billion euros. The two companies will operate under the same group in a partnership, after Porsche failed to takeover VW.Martin Winterkorn, CEO Porsche, said: “In the integrated group VW-Porsche, Porsche will have the freedom to carry on its business with exclusive cars even more successfully. And Porsche will keep on being a strong, independent brand.” A re-think on current models and future customers may be the only way forward for Porsche, if it hopes to survive. That’s the view from industry analyst, Willi Diez: “Porsche needs smaller cars. The market for top quality cars goes for more compact vehicles. For example, Porsche needs a smaller SUV than the Cayenne. Among sports cars there’s lots of potential for smaller models.” Having both Porsche and Volkswagen under the same umbrella may lead to increased brand rivalry. VW already make smaller and cheaper cars, including their 4X4 Touareg model.