Diess Named Volkswagen Group CEO As Company Plans a New Way of Managing Brands

Volkswagen brand chief Herbert Diess, 59, now pulls all the levers at Volkswagen Group. On Thursday, the automaker’s supervisory board appointed Diess as CEO and said goodbye to Matthias Müller, who stepped down from the top position “by mutual agreement,” effective immediately.

The shakeup at the top comes as Volkswagen Group changes the way it manages the multiple brands under its corporate umbrella. There’s now a plan for six new business areas (plus the formation of a China region), with VW Group brands organized into three tiers — volume, premium, and super premium. All of this, in VW’s view, should lead to a streamlined decision-making process and a nimbler company.

Müller, who served as CEO for three years, was seen as being too slow in positioning the company for growth in a changing automotive landscape. The investigations arising from the emissions scandal continue to dog the company, and many see Müller as being too close to the issue.

Diess, on the other hand, hopped from the executive ranks of BMW to VW in 2015, just a couple of months before the scandal broke, and has already proven his mettle by taking on the brand’s powerful labor union and crafting a contract that saved VW Group billions.

He also oversaw the VW brand’s pivot towards electric vehicles. In addition to his duties as CEO, Diess will also oversee the Group R&D and Vehicle IT departments.

“The Volkswagen Group is a union of strong brands with great potential. Matthias Müller has laid the groundwork for our transformation,” Diess said in a statement. “My most important task will now be to join with our management team and our Group workforce in consistently pursuing and pushing forward our evolution into a profitable, world-leading provider of sustainable mobility. In a phase of profound upheaval in the automotive industry, it is vital for Volkswagen to pick up speed and make an unmistakable mark in e-mobility, the digitalization of the automobile and transportation as well as new mobility services.”

Another task dropped on Diess’ plate is getting the company’s truck and bus division ready for an initial public offering.

After the outgoing CEO’s “decision” to resign, supervisory board chair Hans Dieter Pötsch thanked Müller for helping VW Group “safely navigate” the stormy waters of the diesel scandal. Diess, he said, was “predestined to fully implement our Strategy 2025” based on his success in realigning the Volkswagen brand.

Having Diess at the helm could spur investor interest in a company traditionally regarded as being too top-heavy and bureaucratic — something the group’s board was surely only too aware of. In this sense, Müller’s departure is reminiscent of former Ford CEO Mark Fields’ exit.

Diess isn’t the only executive taking on new duties. In addition to his role as BMW head, Rupert Stadler will oversee VW Group’s sales, while Porsche boss Oliver Blume will take on group production and sit on the company’s board.

[Image: Volkswagen Group]