Herbert Dies's tenure as CEO is assessed early on whether he can extend a revision of the VW nameplate on the entire 12-brand VW Group and prepare for an era of battery-powered and autonomous vehicles. Picture credits: BLOOMBERG

UPDATED: 12.04.18 14:47 ET

BERLIN – Herbert Diess will replace Matthias Mueller as CEO of the Volkswagen Group, thereby further revitalizing the company's activities on Thursday that it will create six new divisions and a special portfolio for China, its largest market, and divide its brands in three new vehicle groups: value, premium and super-premium nameplates

The announcement was made after the Volkswagen directors Mueller disempowered and ways to reform an empire with motorcycle, bus, truck and passenger car brands such as Ducati, Bentley, Porsche, Audi, Scania and Skoda

Volkswagen replaced Mueller, after it did not succeed was to refocus the portfolio of car brands, an important pillar of "Strategy 2025" to make the company after the diesel scandal in 2015 a leader in cleaner cars chen. [19659004] Diess, the current head of the VW namesake brand, will also name the VW Group R & D and what the automaker calls "Vehicle IT" or connectivity.

Mueller, who has held the CEO position for less than three years, is

This appointment will be the key to reassuring investors that the highly centralized German industrial group is determined to reform itself. Excessive spending and poor budget discipline caused profit margins to fall even before the car manufacturer's diesel emissions crisis broke out.

His term of office is judged early on, after he can extend a revision of the VW nameplate to the entire 12-brand group preparing for an era of battery-powered and autonomous vehicles.

Former BMW executive board member who just a few months before The announcement of emissions violations came to VW and from the beginning promised to pursue new technologies while limiting expenditure growth. This project became much more urgent as the diesel scandal caused enormous costs and led to the establishment of established stakeholder groups.

Bernd Osterloh, the mighty union leader, shied away from tough contract negotiations with him in 2016, but this was compounded by a groundbreaking deal that paved the way for cuts of up to 30,000 jobs and savings of € 3.7 billion.

"My most important task now will be to work consistently with our management team and our employees. We will drive our development to become a profitable, global leader in sustainable mobility," said Diess in the statement.

Although certain details of the new management functions of Volkswagen AG will not be available until Friday, the company has made a few things clear. Rupert Stadler, the embattled head of Audi, took over the responsibility for the sale of the entire Volkswagen Group, while Oliver Blume, the head of Porsche, took over the group production and joined the group's executive board, the company said.

Volkswagen is also changing its purchasing department. The company said Francisco Javier Garcia Sanz, the head of procurement, leaves the company "at its own request." Sanz played a crucial role as the automaker made its way through the diesel emissions breaches. He should be replaced at least temporarily by Ralf Brandstätter, who is responsible for procurement for the Volkswagen brand, it said.

Other appointments announced by the car manufacturer on Thursday include Gunnar Kilian of the Company's Works Council as Group Leader Human Resources, succeeding Karlheinz Blessing, who will be available as a consultant until the end of his contract.

Diess, as head of purchasing at BMW, was instrumental in getting the luxury brand to survive the financial crisis with delivery costs of more than € 4 billion. He then took over the development, but was eventually ignored for the CEO job when the company in December 2014 Harald Krueger selected. That spurred his move to Volkswagen.

The appointment of Diess was acclaimed by analysts.

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

Bloomberg, Reuters and Larry Vellequette contributed to the report.



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