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VOLKSWAGEN Group has announced that its CEO and chair of the management board, Herbert Diess, is stepping down and will be succeeded by the current head of Porsche, Oliver Blume.

Mr Diess has been in the top job for four years and was responsible for Volkswagen’s rapid expansion into electric vehicles and the man credited with putting in place the industry’s biggest EV rollout.

But he reportedly clashed with its work council and board, and the Porsche and Piëch families, who own more than half the voting rights and a 31.4 per cent equity stake in Volkswagen, were said by The Guardian newspaper to have pushed for “a change at the helm”.

Mr Diess will leave his role on September 1, three years before the end of his contract in 2025, with a reputed payout of about $A45 million.

Having joined VW Group in 1994 and has been the chair of Porsche’s board since 2015, Mr Blume has held management positions for the company’s brands of Audi, Seat, Volkswagen and Porsche.

Mr Blume will retain his position at Porsche alongside his new responsibilities “including in the event of a possible (stock market flotation)”, a company statement said.

Volkswagen Group has discussed a possible float of Porsche in the fourth quarter as a means to fund Volkswagen’s move to become an EV manufacturer but poor market conditions mean a public listing could greatly reduce the float value.

In a statement, Volkswagen Group said: “Oliver Blume has proven his operational and strategic skills in various positions within the group and in several brands and has managed Porsche AG from a financial, technological and cultural standpoint with great success for seven years running.

“From the supervisory board’s point of view, he is now the right person to lead the group and to further enhance its customer focus and the positioning of its brands and products.”

The Guardian said that Mr Diess’s future at Volkswagen had been in doubt after communication missteps angered the workers’ council, most recently in autumn last year after he stated a mismanaged transition to electrification could cost the car-maker more than 30,000 jobs.

He was also lambasted for his frequent public warnings that Volkswagen was falling behind Tesla.

The instability weighed on Volkswagen’s market value, which has been spiralling since early 2021.

In Europe, Volkswagen is ahead on EV sales, with roughly 25 per cent of the market share compared with Tesla’s 13 per cent.

Mr Diess, in a LinkedIn post before the announcement of his departure, said: “After a really stressful first half of 2022, many of us are looking forward to a well-deserved summer break.”

Mr Diess, a native of Bavaria in southern Germany, joined Volkswagen from BMW in July 2015, just months before news broke that VW had cheated emissions tests in the US.

By Neil Dowling

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