Volkswagen names new boss to steer sweeping overhaul

VOLKSWAGEN has chosen Herbert Diess as its new chief executive in an overhaul that includes streamlining the company’s multiple car brands into just three groups while preparing its truck business for a potential listing.

The plans were announced after Volkswagen board of directors ousted Matthias Mueller as CEO and discussed ways to overhaul the company, which spans motorbikes, buses, trucks and passenger car brands including Ducati, Bentley, Porsche, Audi, Scania and Skoda.

Mueller’s replacement with VW brand chief Diess follows slow progress in reorganizing the group’s car brands, a key pillar of “Strategy 2025” to transform the Germany’s biggest car company into a leader in cleaner cars and to move on from its diesel emissions scandal of 2015.

For Volkswagen its the biggest overhaul since it became a multi-brand conglomerate under former chief executive Ferdinand Piech, a grandson of VW Beetle designer Ferdinand Porsche.

Under the plans, announced on Thursday, Volkswagen will divide itself into six new business areas, plus a portfolio for China, as part of an effort to decentralise responsibility and improve efficiency.

The carmaker will prepare its truck and bus division for “capital market readiness” by making it a public limited company as a prelude to a potential listing, confirming a Reuters report from last month. The new car brands will be Volume, Premium and Super Premium. Earlier on Thursday, sources had told Reuters that VW would reorganise its brands into these groups.

Analysts welcomed the appointment of Diess, a former BMW (BMWG.DE) executive who has more than doubled profitability at the VW brand since taking charge in 2015.