Wendelin Wiedeking said so himself: "there will be no baby Cayenne." He was telling the truth, but according to latest rumor he simply didn't finish telling the truth. There will be no baby Cayenne that is sold alongside the current Cayenne. But it is speculated that the current Cayenne, for its next generation, will get smaller. After succeeding spectacularly with the Cayenne, Porsche has supposedly decided that it wants to inject the car with better performance and a more car-like driving experience.
All that means is: they want to CUV-ify it. Engines would be carried over, which would give the car the same power yet potentially better mileage. Porsche is pegging 24 mpg. But the Cayenne hybrid, especially with less to drag around, could increase that appreciably (for what will still be a heavy vehicle), since Porsche is projecting 26 mpg for the hybrid at its current size. So here's an SAT word game for you: Touareg is to Cayenne as Tiguan is to....?
[Source: eGM Car Tech]