Mr Pischetsrieder (72) replaces Manfred Bischoff who has elected to retire.
Daimler was expected to bring back former CEO Dieter Zetsche as chairman but Mr Zetsche withdrew from nomination after some investors voiced concerns at the company’s static share price and earnings during his 13-year tenure.
Mr Pischetsrieder, who has been on the Daimler board since 2014, was previously the CEO of BMW AG and CEO of Volkswagen AG.
He started his career at BMW in 1973 in its production planning area and was technical director for BMW in South Africa from 1982 until 1985.
In 1989 he was appointed to the board of management of BMW AG and became CEO in 1993. He left the company following BMW’s takeover of British car-maker Rover Group, which led to huge losses.
He then joined Volkswagen as a management board member in 2000 and was named CEO in 2002. In 2006, he was ousted from the board by Volkswagen patriarch Ferdinand Piech after clashing with the company’s powerful labor unions.
He remained as an advisor to the Volkswagen board of management from 2007 until 2012.
Outgoing Daimler chairman Manfred Bischoff said: “Bernd Pischetsrieder is one of the most internationally recognised automotive experts. His expertise and wealth of experience are of outstanding importance for Daimler.”
Daimler is undergoing a transition under CEO Ola Kallenius who has a strategy to boost returns by focusing more on bigger cars such as the flagship S-Class sedan and cutting thousands of jobs.
Mr Kallenius has also started new partnerships with rival companies and technology firms and plans to boost the company’s software operations.
His moves have seen Daimler shares rise more than 16 per cent this year, outperforming BMW and Volkswagen.
Mr Bischoff, Petraea Heynike and Juergen Hambrecht will leave Daimler’s supervisory board and be succeeded by Cisco Systems Inc.’s Elizabeth Centoni, Royal Dutch Shell Plc CEO Ben van Beurden and BASF SE chief Martin Brudermueller.
By Neil Dowling