Volkswagen names Herbert Diess as new CEO

Porsche 911 Speedster

Porsche 911 Speedster

Diess said that he will work to increase the efficiency of synergies across the group's companies, highlighting the importance of streamlining decision making processes in order to adapt to the fast-changing vehicle industry.

Diess currently heads the firm's namesake Volkswagen division, but now takes over a larger parent company that owns brands including Porsche, Audi, Bentley, Bugatti and Lamborghini.

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.

"He assumed the chairmanship of the board of management in the fall of 2015 when the company faced the greatest challenge in its history". It will also split its brands into three new vehicle groups: value, premium and super-premium.

The volume business will include the VW brand, Seat and Skoda, as well as light commercial vehicles.

Suspicions of emissions cheating have also spread to other carmakers, shattering diesel's image as a clean engine and prompting several smog-clogged German cities to mull diesel driving bans.

He set out his goals for the entire group on Thursday: "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", he said in a statement.

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

As part and parcel of the Diess appointment, the automaker also announced that it is streamlining its product offerings.

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. Mueller past year earned about 10 million euros in pay and benefits.

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 Porsche sports auto division head Oliver Blume is being promoted to the top management body of the entire group, Volkswagen said.

One business area will be dedicated to China while another would be dedicated to its Truck & Bus division.

Bundling the brands together is a move aimed at speeding up decision-making processes within the company.

Osterloh and Diess struck a deal in November 2016 on cost savings and job cuts through natural attrition, and on Friday Osterloh said job security and profitability were now equally important at the company.

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