FRANKFURT — Volkswagen Group CEO Herbert Diess is stepping down and will be succeeded by Porsche boss Oliver Blume.
Diess is resigning “by mutual agreement,” VW said on Friday.
Blume will continue his role as the head of the Porsche brand, flanked by VW’s current Chief Financial Officer Arno Antlitz, who will assume the position of chief operating officer.
The changes come into effect on Sept. 1, VW said.
Diess’ future at Volkswagen has been in doubt on multiple occasions during his four-year stint as CEO, most recently late last year over clashes with the company’s powerful works council about his electrification strategy and management style.
His departure comes as the company is pushing to beat Tesla at becoming the world’s top electric vehicle maker, catch up on software and execute an IPO for the Porsche sports car brand.
Blume said in a statement: “My focus will be on the customers, brands and products.”
Diess, 63, was hired away from BMW in 2015, shortly before VW admitted to rigging millions of diesel vehicles to cheat on emissions tests. He has arguably pushed the most aggressive electrification effort among legacy car manufacturers, earning plaudits from the likes of Tesla CEO Elon Musk.
Blume, 54, has been touted as a potential successor to Diess for some time, even though any changeover was seen some time off after Diess’s contract was extended until 2025.
Blume started at VW Group in 1994 as a trainee at Audi, then rose through the ranks at Seat and the VW brand before joining Porsche in 2013 as head of production.
He managed to largely contain Porsche’s involvement in VW’s diesel-emissions scandal. The sports-car maker received diesel engines from sister brand Audi, which didn’t comply with emission regulations.
The Porsche and Piech families, VW Group’s majority shareholders, saw the need for a change at the helm of the automaker, two sources with knowledge of the matter told Reuters on Friday.
Cox Automotive executive analyst Michelle Krebs said the turmoil around Diess had perhaps become a distraction at VW. “It shouldn’t be a surprise because his tenure has been rocky and controversial,” she said.
Bernd Pischetsrieder, Volkswagen CEO from 2002-2006, and Wolfgang Bernhard, VW brand chief from 2005-2007 were forced out of their jobs after repeated clashes with VW’s works council.
Reuters and Bloomberg contributed to this story