BY Jorn Madslien
BBC News Online business reporter at the Geneva Motor Show
Dr Pischetsrieder: Still in the picture
Volkswagen's many new models on display at the Geneva show go some way to creating an impression of a company in good health.
The reversioned Audi A6 has been given a new aggressive front. The Beetle Cabriolet hints at the car maker's roots.
But it is all an illusion.
In fact, Europe's biggest car maker is in deep trouble.
The group - which owns Audi, Volkswagen, Seat and Skoda, as well as Bentley, Bugatti and Lamborghini - has seen its profits slide ever since group chairman and chief executive Bernd Pischetsrieder took over in May 2002.
Last month, VW reported a 48% fall in operating profits for 2003 to 2.5bn euros (£1.67bn; $3bn).
By VW's own admission, the future looks bleak as well.
"The markets were very weak at the beginning of the year," said Dr Pischetsrieder.
"If the market we saw in January and February continues, it will be very difficult to beat last year's [profit] levels," added chief financial officer Hans Dieter Poetsch.
In an effort to sort it all out, Dr Pischetsrieder has announced plans to slash costs by 4bn euros and reduce the automotive division's workforce by 3.5%.
Reduced spending and investment in new car developments would be welcomed by investors who are concerned about Dr Pischetsrieder's feeble grasp on costs.
But the chief's latest moves are unlikely to appease analysts who are voicing concerns about weak sales of both the luxurious VW Phaeton and the latest version of VW's oldest model, the Golf.
High hopes had been pinned on the fifth incarnation of the Golf, which was launched at the Frankfurt Motor Show in September last year.
VW's share price rose from 30 euros to more than 45 euros per share in the months preceding the show.
But soon after its launch, the car ran into trouble as VW was forced to offer incentives, such as free airconditioning, to fuel sales of the model.
This "suggests that all is less than brilliant there", according to Invesco Asset Management fund manager Gerald Roessel.
Since the launch of the new Golf, VW's share price has slipped sharply.
It is not quite back to where it was a year ago, but still the stock is currently trading well below 40 euros.
Analysts are also concerned about VW's expensive push into the market for luxury cars with its Phaeton, the Audi A8, the Bentley Continental GT and the Bugatti Veyron.
Though in fairness, analysts cautioned, Dr Pischetsrieder should not be blamed for all problems arising from such lavish expansionism, since some of these investments arose under his predecessor, Ferdinand Piech.
New Audi A6: An upmarket VW
And yet, concerns remain about Dr Pischetsrieder's ability to handle a portfolio containing several car marques.
The launch of the VW Phaeton as a head-on competitor to the Audi A8 is one example of the difficult decisions this multi-marque manager has to make.
Another challenge has to be to differentiate the Seat, Skoda and VW brands, a task Dr Pischetsrieder has not yet fully achieved.
His track record as a caretaker of a bundle of brands is not good: During his days as chief executive of BMW, in the mid-1990s, he oversaw the disastrous acquisition of Rover with its Mini, MG, Land Rover and Rover brands.
But Dr Pischetsrieder also scored some points while heading up BMW.
For example, when VW under Mr Piech was buying The Rolls-Royce & Bentley Motor Company, he managed to snatch the Rolls-Royce badge from under VW's nose on behalf of BMW.
It was apparently this snazzy manoeuvre - which explains why Rolls-Royce and Bentley have become competitors - that convinced Mr Piech to appoint him as his successor.
Now, Dr Pischetsrieder's skills as a shrewd operator are required once more as he tries to force through change within the cumbersome car giant.
Cost cutting and job cuts are not popular measures, neither among VW's workers who are represented on the group's board, nor among all its share holders.
The German state of Lower Saxony owns about one fifth of the group.
And unlike an ordinary profit-maximising share holder, the state may be willing to operate with lower margins in order to secure jobs in the region.