Volkswagen's Herbert Diess to head volume brand division

"In order to sustainably implement the new structure, there will be a number of changes on the board of management".

VW Group hopes the new management system will streamline the company, quickening the decision-making process.

Some analysts cheered the appointment of Mr Diess.

Human resources head Karlheinz Blessing is being replaced by Gunnar Kilian, until now an official with the company's works council, or employee representatives.

And the CEO of subsidiary Porsche, Oliver Blume, will join the VW board.

Diess made the disclosure at his first news conference as chief executive at VW's headquarters in Wolfsburg, Germany, on Friday.

He assumes control from Matthias Mueller, who was designated in 2015 at the stature of the diesel emanations outrage.

The changes come as Volkswagen and other conventional auto manufacturers compete with industry newcomers such as Waymo and Uber for the burgeoning autonomous taxis and car-sharing services market, where vehicle ownership is less of a passenger priority.

Aside from separating the trucks unit, VW plans to regroup its 12 vehicle brands into four groups to forge closer ties between similar nameplates like mass-market Skoda and Seat.

"The creation of brand groups has been under consideration for a while", he said about the biggest overhaul since VW became a multi-brand conglomerate under former CEO Ferdinand Piech, a grandson of VW Beetle designer Ferdinand Porsche.

Longtime CEO Winterkorn quit days after the firm admitted to installing software in 11 million diesel vehicles worldwide created to cheat regulatory emissions tests in a scandal that became known as "dieselgate".

However, in May 2017 prosecutors in Stuttgart said they were investigating Mr Mueller over suspicions he may have known about the diesel cheating before it became public. VW has also had to pay out billions of euros in fines following its 2015 emissions cheating scandal.

"Diess is a man of action, he is the most plausible choice at VW to lead the group into the next phase of its transformation", said Nord LB analyst Frank Schwope.

Shares in Volkswagen climbed 1.7% to ß176.06 (R2 603) in late morning trade in Frankfurt, vastly outperforming the Dax index of leading shares that was up just 0.1%.

Mueller held the top job for more than 2½ years after succeeding CEO Martin Winterkorn, who was ousted days after the company's diesel pollution scandal, was exposed in September 2015.

The carmaker remains mired in legal woes overseas and in its home market, where it also faces looming diesel bans in some smog-clogged inner cities that have already depressed resale prices to the chagrin of millions of motorists.

Diess brings an outsider's perspective to the job, having joined Volkswagen in July 2015 after spending almost two decades at rival German automaker BMW. Finally, another group will focus on research and development, sales and production.

  • Tracy Klein