"The main problem with VW is the past. Many investors have been very disappointed and frightened away,"" said one Paris-based fund manager.

VW shares trade at about nine times 2002 estimated earnings, compared to BMW's 19 and are the second cheapest in the sector."

A disastrous capital hike, an expensive foray into the trucks business and uncertainty about the reason for a share buyback have in recent years left investors bewildered.

Despite posting healthy profits, VW shares trade at a discount to peers due to a bad reputation among investors, high capital expenditure and its close links to the state of Lower Saxony, which effectively has a blocking minority.