The exit of Volkswagen AG Chief Executive Bernd Pischetsrieder is raising worries among investors that the company's vital cost-cutting program could falter if Wolfgang Bernhard, his deputy in charge of the drive, goes too.

Volkswagen shares fell 1.5% to £¿0 ($102.17) yesterday in Frankfurt trading. The decline followed Volkswagen's announcement Tuesday that Mr. Pischetsrieder, who has led the company since 2002 and secured a five-year contract extension six months ago, would leave at the end of the year. His successor is Martin Winterkorn, head of Volkswagen's luxury Audi division and a close ally of Volkswagen Chairman Ferdinand Pi?ch.

The company's move -- announced in a three-sentence statement that included no thanks to Mr. Pischetsrieder for his service as CEO -- leaves the status of several of Mr. Pischetsrieder's closest aides unclear. At the top of investors' concerns is the status of Mr. Bernhard, whom Mr. Pischetsrieder recruited to the company in late 2004 to turn around its ailing VW brand, which accounts for more than 60% of the company's vehicle sales.

A company spokesman said Mr. Bernhard wasn't available to comment yesterday. The company declined to respond to written questions about Mr. Bernhard's status.

Mr. Bernhard, 46 years old, has been spearheading Volkswagen's push to cut as many as 20,000 jobs during the next three years and to raise its flagging productivity levels. Those changes are being watched closely by Volkswagen's rivals in Europe, many of which are also struggling with high labor costs and underutilized plants. They face pressure from Asia-based car makers such as Toyota Motor Corp., which are gaining market share in Europe and aren't burdened with the same costs.

"With Dr. Pischetsrieder's resignation, we believe the 'investing in restructuring' case at VW can't be sustained," John Lawson, an analyst with Citigroup Research, said in a note yesterday, adding that, "at worst," the jobs of Mr. Bernhard and VW's chief financial officer, Hans Dieter P?tsch, could be in jeopardy. The firm said it was cutting its rating on VW stock to "Hold/Medium Risk" from "Buy/Medium Risk."

A spokesman said Mr. P?tsch wasn't available to comment.

Word of Mr. Pischetsrieder's resignation came as a shock to some members of Volkswagen's board of directors, according to a person familiar with the matter. Some members learned the news through a fax sent to them by Mr. Pi?ch minutes before the official announcement, this person said. A day earlier, Mr. Pischetsrieder had appeared with Mr. Pi?ch at an event at the company's headquarters to mark the opening of a vehicle-testing facility.

The selection of Mr. Winterkorn as Mr. Pischetsrieder's successor is drawing scrutiny partly because of Mr. Winterkorn's close relationship with Mr. Pi?ch, a frequent target of criticism from investors, who say Mr. Pi?ch bears significant responsibility for the company's profit slide in recent years.

In an interview with The Wall Street Journal earlier this year, Mr. Pi?ch, who was Volkswagen CEO from 1993 until 2002, when he took the post of chairman, expressed unhappiness with some cost-cutting efforts made at the VW brand during the past year. He said he was more satisfied with the performance of the company's Audi division, which has contributed steady profits. Through a spokesman, Mr. Pi?ch declined to be interviewed or respond to written questions.

At 59 years, Mr. Winterkorn is a year older than Mr. Pischetsrieder. Although he has presided over growing sales at the company's premium Audi brand, his tenure at the division has also been characterized by a weaker performance by its Spanish unit, Seat. A spokesman for Mr. Winterkorn said he wasn't available for interviews yesterday. Among the leading candidates to succeed him as head of Audi is Jochem Heizmann, currently a senior Audi executive with responsibility for production, according to people familiar with the matter.