In an industry obsessed with size but weak on profits, Porsche Chief Executive Wendelin Wiedeking shows just how beautiful small can be. The niche maker of luxury sports cars produces less than 70,000 vehicles a year but routinely tops almost everyone in the industry on profitability, with last year's operating margin hitting 16.2%. Net profit has nearly tripled since 2001, and Porsche's shares in the past 12 months are up 70%. All that was enough to earn Porsche the No.1 spot in this year's European BusinessWeek 50 ranking. It wasn't always so easy to rev Porsche's profits: The German auto maker was on the brink of bankruptcy when Wiedeking took the wheel in 1993. He swiftly overhauled the flagship 911 model, cut unpopular cars, and launched a new entry-level Porsche called the Boxster. By 1998 he had enough cash and momentum to gamble on a third model: the exclusive Cayenne sport-utility vehicle. The hulking 450-horsepower Cayenne Turbo, built to whip around curves like its sportier sibling, quickly became a status symbol after its launch in 2002, despite a sticker price that can hit $90,000. The Cayenne more than compensated for the flagging sales of Porsche's aging sports cars. Now Wiedeking is launching a sixth-generation 911 model in July, which could power sales handily while the talented car boss ponders a fourth model line for the company.