Volkswagen Group has tapped the development chief of BMW, Herbert Diess, to become part of its management board. In a statement, VW Group said Diess will become chairman of the Volkswagen passenger car brand on Oct. 1, 2015, replacing current chairman Martin Winterkorn.
In a statement, Winterkorn – who will still be the Group CEO responsible for all brands like Audi, Porsche, Bentley, Bugatti and Lamborghini – called that Diess is an “outstanding personality and one of the most capable minds” in the auto industry.
Winterkorn is currently CEO of both VW Group and VW brand. Diess, who holds a doctorate in mechanical engineering, joined BMW in 1996 after working for German supplier Robert Bosch. He has been serving as member of BMW’s management board since October 2007.
Arndt Ellinghorst’s Evercore ISI's global automotive research chief, said in a note to investors that Diess’ appointment is “big and good news” for VW as he is very well respected and well-known for his direct and straight management style.
He noted that with Diess on board, VW brand would have an easier time raising its profit margin to 6 percent from 2.3 percent. Ellinghorst noted that with his appointment, Diess has become as potential successor to Winterkorn as VW Group CEO.
His appointment at VW brand means that Winterkorn’s burden of running both the marque and the group would become lighter. Winterkorn has been shoring up management ranks to prepare for an eventual change in leadership. [source: VW]