VW picks Diess as new CEO

BERLIN: Volkswagen AG (VW) picked a new leader in a management shakeup to ready the world’s largest carmaker for a wave of technological change upending the industry’s traditional business models.

Herbert Diess, the head of VW’s namesake brand, would become chief executive officer (CEO) as well as overseeing technology across the organisation, said the company in a statement on Thursday.

The manufacturer will be grouped into six business areas, with the truck and bus division to be prepared for a potential standalone stock listing.

“My most important task will now be to join with our management team and group workforce in consistently pursuing and pushing forward our evolution into a profitable, world-leading provider of sustainable mobility,” said Diess.

He’s scheduled to hold a press conference soon at VW’s Wolfsburg, Germany, headquarters to lay out his plans.

The realignment focuses power in Diess’s hands, as he will continue to oversee the namesake division.

Diess’s appointment to succeed Matthias Mueller, who steps down immediately, will be key to reassuring investors that the highly centralised German industrial behemoth is capable of reform.

Excessive spending and poor budget discipline were eroding profit margins even before the carmaker’s diesel-emissions scandal erupted in September 2015.

Diess’ term will be judged early on by whether he can scale up revamp of the VW brand to the entire 12-brand group to prepare for an era of battery-powered self-driving cars.

One sign of the overhaul gaining traction is VW entering the home stretch for a potential share sale in its heavy-truck division, the biggest organisational shift since the aftermath of the diesel-emissions crisis.