When Christian Streiff took over as PSA Peugeot Citreon's chief executive last month, he made the mildest of corporate debuts. The combative restructuring expert who quit Airbus last year after failing to impose his will at the aerospace giant seemed determined to damp expectat ions that he could quickly return Europe's second-largest carmaker to profitability. At presentations to analysts and the media in Paris and London, Peugeot's new boss was almost apologetic. He described the car business as "one of the most complex" around. Dashing some investors' expectations of a quick turnround, he promised to report back in September with a long-term strategy for the company. A Goldman Sachs analyst advised investors to dump PSA's stock, saying: "Sell and wait rather than wait and see." All this says something about the current mood in the global car business: one of the world's toughest industries is arguably tougher these days than ever. Cars themselves, of course, are of higher quality, with cleaner engines, and more attuned to consumer tastes than ever. Visitors to the Geneva International Motor Show this week will see the industry at its best, with launches ranging from hybrid sports cars from Toyota and Honda to a new version of the Twingo, Renault's tiny city car. Seen differently, however, the multitude of shiny new models on display at Geneva bears witness to a business where too many manufacturers are chasing too few buyers. Demand for cars in North America, Europe and Japan is forecast to be stagnant at best this year, pushing Peugeot and most of its peers ever further into faster-growing - if already well-served - emerging markets, led by China. Commodity prices remain high, translating into steep costs for vehicle components ranging from platinum to plastic and rubber. Regulators are pushing producers harder to produce cleaner cars, most starkly in the European Union, which wants the industry to shoulder much of the burden of a plan to cut carbon dioxide emissions radically in coming years. While many global carmakers are trying to reduce fleet sales and incentives in order to boost the profitability of their vehicles, carbuyers - especially America's spoilt-for-choice consumers - know they still wield much power at dealerships. Adding to the already intense cost pressure on original equipment manufacturers, carbuyers everywhere are demanding vehicles chopped and changed to meet their requirements.

Manufacturers are absorbing much of the margin pressure themselves, but passing on some of it to parts suppliers, which are under intense pressure themselves - particularly in the US. In a sure sign of a sub-sector on the cusp of significant restructuring, private equity investors have been circling troubled suppliers and, as seen in recent buy-out offers for Delphi and Lear, buying them. Tellingly, few car companies seem to be in an acquisitive mood these days. DaimlerChrysler's announcement last month that it was considering "all options" for money-losing Chrysler sent a frisson of speculative interest through the industry with the confirmation of talks on a tie-up with General Motors. However, as this report went to press, a final deal to sell all or part of Chrysler remained by most accounts distant. Even Carlos Ghosn, Renault/Nissan's globally ambitious chief executive, said he had his hands full managing his two companies. In this context, Mr Streiff's caution in not promising too much for Peugeot may prove wise. The industry's problems remain most dramatic in Detroit, where - apart from the turn of events at Chrysler - Ford Motors and GM are, respectively, in early and advanced stages of turnround plans aimed at restoring profitability. The biggest Japanese producers are still reporting buoyant global profits, but they too would be struggling if they depended mostly on their depressed local market.