Dr. Ing. h.c. F. Porsche AG, often shortened to Porsche AG, or just Porsche, is a German sports car manufacturer, founded in 1931 by then Austrian Ferdinand Porsche, the engineer who also created the first Volkswagen. The company is located in Zuffenhausen, a city district of Stuttgart, Baden-Württemberg.
Professor Ferdinand Porsche initially started the company called "Dr. ing. h. c. F. Porsche GmbH" in 1931, with main offices in Königstrasse in the middle of Stuttgart. The company offered motor vehicle development work and consulting, and did not initially build any cars under its own name. One of the first assignments the new company got was from the German government to design a car for the people, a "Volkswagen" in German.

The first Porsche, the Porsche 64, was developed in 1939 using many components from the Volkswagen Beetle.

Ferdinand Porsche's son, Ferry Porsche, decided to build his own car because he could not find an existing one that he would buy. The first models of what was to become the 356 were built in a small workshop in Gmünd, Austria and had aluminum bodywork. The prototype car was shown to German auto dealers, and when pre-orders reached a set threshold, production was begun. Many regard the 356 as the first Porsche simply because it was the first model sold by the fledgling company. Porsche commissioned Zuffenhausen-based company Reutter Carosseri, which had previously collaborated with Porsche on Volkswagen Beetle prototypes, to produce the 356's steel body. Porsche constructed an assembly plant across the street from Reutter Carosseri; that assembly plant is now known as Porschestrasse. The 356 was road certified in 1948.

Not long afterwards, on January 30, 1951, Ferdinand Porsche died from complications following a stroke.

In post-war Germany parts were generally in short supply, so the 356 automobile used components from the Beetle including its engine, gearbox, and suspension. The 356, however, had several evolutionary stages, A, B, and C, while in production and many VW parts were replaced by Porsche-made parts. The last 356s were powered by entirely Porsche-designed engines. The sleek bodywork was designed by Erwin Komenda who also had designed the body of the Beetle. Porsche's signature designs have, from the beginning, featured air-cooled rear-engine configurations (like the Beetle), rare for other car manufacturers, but producing automobiles that are very well balanced.

In 1963, after some success in motor-racing, namely with the Porsche 550 Spyder, the company launched the Porsche 911 another air-cooled, rear-engined sports car, this time with a 6-cylinder "boxer" engine. The team to lay out the body shell design was led by Ferry Porsche's eldest son, Ferdinand Alexander Porsche (F. A.). The design phase for the 911 caused internal problems with Erwin Komenda who led the body design department until then. F. A. Porsche complained Komenda made changes to the design not being approved by him. Company leader Ferry Porsche took his son's drawings to neighbouring body shell manufacturer Reuter bringing the design to the 1963 state. Reuter's workshop was later acquired by Porsche (so-called Werk II). Afterward Reuter became a seat manufacturer, today known as Keiper-Recaro.

The design group gave sequential numbers to every project (356, 550, etc) but the designated 901 nomenclature contravened Peugeot's copyrights on all 'x0x' names, so it was adjusted to 911. Racing models adhered to the "correct" numbering sequence: 904 906, 908. The 911 has become Porsche's most well-known model, successful on the race-track, in rallies, and in terms of sales. Far more than any other model, the Porsche brand is defined by the 911. It remains in production; however, after several generations of revision, current-model 911s share only the basic mechanical concept of a rear-engined, six-cylinder coupe, and basic styling cues with the original car. A cost-reduced model with the same body, but 356-derived running gear (including its four-cylinder engine), was sold as the 912.

In 1972 the company's legal form was changed from limited partnership to public limited company (German AG), because Ferry Porsche and his sister, Louise Piëch, felt their generation members did not team up well. This led to the foundation of an executive board whose members came from outside the Porsche family, and a supervisory board consisting mostly of family members. With this change, no family members were in operational charge of the company. F. A. Porsche founded his own design company, Porsche Design, which is renowned for exclusive sunglasses, watches, furniture, and many other luxury articles. Ferdinand Piëch, who was responsible for mechanical development of Porsche's serial and racing cars, formed his own engineering bureau and developed a 5-cylinder-inline diesel engine for Mercedes-Benz. A short time later he moved to Audi and pursued his career through the entire company, up to and including, the Volkswagen Group boards.

The first CEO of Porsche AG was Dr. Ernst Fuhrmann who had been working in Porsche's engine development. Fuhrmann was responsible for the so-called Fuhrmann-engine used in the 356 Carrera models, as well as the 550 Spyder, having four over-head camshafts instead of a central camshaft as in the Volkswagen-derived serial engines. He planned to cease the 911 during the 70s and replace it with the V8-front engined grand sportswagon 928. As we know today the 911 outlived the 928 by far. Fuhrmann was replaced in the early 80s by Peter W. Schutz, an American manager and self-proclaimed 911 aficionado. He was replaced in 1988 by the former manager of German computer company Nixdorf Computer AG, Arno Bohn, who made some costly miscalculations that led to his dismissal soon after, along with that of the development director, Dr. Ulrich Bez, who was formerly responsible for BMW's Z1 model and today is CEO of Aston Martin.

In 1990, Porsche drew up a memorandum of understanding with Toyota to learn and benefit from Japanese production methods. Currently Toyota is assisting Porsche with hybrid technology, rumored to be making its way into a Hybrid Cayenne SUV, as well as the upcoming four-door coupe, the Panamera.

Following the dismissal of Bohn, an interim CEO was appointed, longtime Porsche employee, Heinz Branitzki, who served in that position until Dr. Wendelin Wiedeking became CEO in 1993. Wiedeking took over the chairmanship of the board at a time when Porsche appeared vulnerable to a takeover by a larger company. During his long tenure, Wiedeking has transformed Porsche into a very efficient and profitable company.

Ferdinand Porsche's grandson, Ferdinand Piëch, was chairman and CEO of the Volkswagen Group from 1993 to 2002. Today he is chairman of the supervisory board. With 12.8 per cent of the Porsche voting shares, he also remains the second largest individual shareholder of Porsche AG after his cousin, F. A. Porsche, (13.6 per cent).

Porsche's 2002 introduction of the Cayenne also marked the unveiling of a new production facility in Leipzig, Saxony, which once accounted for nearly half of Porsche's annual output. The Cayenne Turbo S has the second most powerful production engine in Porsche's history, with the most powerful belonging to the Carrera GT.

In 2004, production of the 605 horsepower Carrera GT commenced in Leipzig, and at EUR 450,000 ($440,000 in the United States) it was the most expensive production model Porsche ever built.
As of 2005, the extended Porsche and Piech families controlled all of Porsche AG's voting shares. In early October 2005 the company announced acquisition of an 18.53% stake in Volkswagen AG and disclosed intentions to acquire additional VW shares in the future. As of June 2006, the Porsche AG stake in Volkswagen had risen to 25.1%, giving Porsche a blocking minority, whereby Porsche can veto large corporate decisions undertaken by VW.

In mid-2006, after years of the Boxster (and later the Cayenne) as the dominant Porsche in North America, the 911 regained its position as Porsche's backbone in the region. The Cayenne and 911 have cycled as the top-selling model since. In Germany the 911 clearly outsells the Boxster/Cayman and Cayenne.

The company has always had a close relationship with Volkswagen, and as noted above, the first Porsche cars used many Volkswagen components. The two companies collaborated in 1969 to make the VW-Porsche 914 and 914-6 whereby the 914-6 had a Porsche engine and the 914 had a Volkswagen engine, in 1976 with the Porsche 912E (USA only) and the Porsche 924, which used many Audi components and was built at an Audi Neckarsulm factory. Most 944s also were built there although they used far fewer VW components. The Porsche Cayenne, introduced in 2002, shares its entire chassis with VW Touareg, which is built at the factory in Bratislava. Both Audi and Škoda are wholly owned subsidiaries of Volkswagen. In late 2005, Porsche took an 18.65% stake in VW, further cementing their relationship and preventing a takeover of Volkswagen, which was rumored at the time. Speculated suitors included DaimlerChrysler, BMW, and Renault.

On 26 March 2007 Porsche took its holding of Volkswagen shares to 30.9%, triggering a takeover bid under German law. Porsche formally announced in a press statement that it did not intend to take over Volkswagen (it would set its offer price at the lowest possible legal value), but intended the move to avoid a competitor taking a large stake or to stop hedge funds dismantling VW, which is Porsche's most important partner. Porsche's move comes after the European Union moved against a German law that protected VW from takeovers. Under the so-called "Volkswagen Law", any shareholder in VW cannot exercise more than 20% of the firm's voting rights, regardless of their level of stock holding. The European Court of Justice has already indicated that the law probably breaks EU rules, and a full judgment to that effect is expected later in 2007.

With the VW stake acquisition, Porsche intends on reforming the company's format, with Dr Ing. h. c. F. Porsche AG becoming a subsidiary of a newly formed holding company called Porsche Automobil Holding SE, so as to separate the operating activities from holding activities of the company. There was an Extraordinary General Meeting for Porsche AG shareholders which took place on June 26, 2007 at the Porsche Arena in Stuttgart, Germany to discuss the change to the company structure.

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