VW's goal is "to safeguard its position among the leaders of the global automotive industry with innovativeness and profitability", said supervisory board chairman Hans Dieter Poetsch.
As an outsider who didn't come up through the Volkswagen ranks as did Mueller, Diess must master the company's unique and sometimes unwieldy corporate culture, which includes a major government stakeholder in the state of Lower Saxony and strong employee representation that has tended to hinder cost-cutting.
The move is part of sweeping changes at the group, which includes Volkswagen, Skoda, Seat, Audi as well as luxury brands Bentley, Bugatti, Porsche and Bentley.
Europe's largest automotive group is poised to replace group chief executive Matthias Mueller this week with Diess, a cost-cutter hired in 2015 from BMW as it seeks fresh impetus for its recovery from an emissions scandal.
Further, Potsch added, "Not only did he safely navigate VW through that time; together with his team, he also fundamentally realigned the group's strategy, initiated cultural change and, with great personal commitment, made sure that the Volkswagen Group not just stayed on track but is now more robust than ever before. Matthias Muller has laid the groundwork for our transformation", Diess said in the release.
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. "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".
Volkswagen admitted in 2015 it had rigged millions of diesel engines to cheat on emissions tests.
One business area will be dedicated to China while another would be dedicated to its Truck & Bus division. Meanwhile, Dr. Franciso Javier Garcia Sanz who has been the head of Procurement and the Chairman of the Supervisory Board of the SEAT brand will be leaving the company. As well as his role as the Chairman of the Board of Management, Diess will also be responsible for Group Development and Research, Rupert Stadler, current Audi CEO, will oversee Group Sales, while Oliver Blume, Porsche CEO, will take responsibility for Group Production.