Porsche Pajun small Panamera sedan news

Reports overnight from Germany said the sedan -- with the current working title of Pajun (for Panamera Junior) -- would be on the market by 2017.

Germany's AutoBild magazine said the new project is being lined up to face off against the Mercedes-Benz E-Class and CLS luxury sedans, and is likely to be armed with a strategic price of between 65,000 to 100,000 euros.

That translates into about $85,000 to $150,000 Australian, and the E-Class starts here at $79,900 for the new E200, but you can expect the Porsche to sit higher against the sportier versions of the E-Class.

Porsche currently has four models:  the Boxster/Cayman two-seaters, 911 sports car, Cayenne SUV and the Panamera sedan, with a fifth model -- the compact Macan SUV in the works.

However Porsche boss Matthias Mueller has previously said the German carmaker may look at expanding the line-up further -- even up to seven models -- as it moves towards its 'Strategy 2018' goal of doubling global sales to 200,000 over the next six years.

Reuters news agency put that question to Porsche spokesman Hans-Gerd Bode, who confirmed there were ideas about a sixth model, but no firm decisions had been made.

A smaller Porsche was always looking more likely as they kept a close eye on the small-car scene, particularly as it boomed in Europe. Previously, Porsche had been rumoured to be involved in a three-way tie-up with Volkswagen and Audi that would result in a sub-Boxster runabout for the brand and similar-sized sports convertibles for its German partners.

At the time, Porsche's Eckhard Eybl said the brand was particularly interested in the success of the Audi A, and would not dismiss the idea of a smaller Porsche.  "I think it would be a very good idea," Ebyl said.

"But this will not be the next step - maybe three or four steps away. I think it's possible to do a very, very good design if you have the heritage of a very clear brand design. And if you are then free to realise the vision."