"The Volkswagen Group's goal is and remains to align the company and its brands with future needs, to safeguard its position among the leaders of the worldwide automotive industry with innovativeness and profitability and to be instrumental in shaping tomorrow's personal mobility with the strength of our Group brands", said chairman of the Supervisory Board Hans Dieter Pötsch in the statement announcing the changes.
Gunnar Kilian, from the company's works council, becomes group head of human resources, succeeding Karlheinz Blessing, who will be available as a consultant until his contract expires.
Corporate restructuring sees group separate vehicle brands into new core divisions - volume, premium and super premium.
"Bundling brands in groups greatly helps to increase synergies", said Bankhaus Metzler analyst Juergen Pieper. Apart from this, Oliver Blume, Porsche CEO will be joined to the group Board of Management. "The trick is to bring down costs where that is possible", he said, citing development and marketing budgets.
Poetsch said that the company has "to a great extent put the diesel crisis behind us".
The company's procurement and component divisions would also be combined as part of the revised structure, Diess said.More news: Billionaire seeks to separate California into three states
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He was installed after Mueller's attempts to reshape the automotive group foundered amid labor opposition, including his plans to sell motorbike brand Ducati.
Volkswagen's new chief vowed Friday to push on with reform and cultural change to steer the German auto giant out of the cloud of the "dieselgate" scandal and into a future of electric cars and sustainable mobility.
Contract 62-year-old Matthias Mueller expires in 2020 Your post he took up in 2015, replacing Martin Winterkorn.
The carmaker remains mired in legal woes overseas and in its home market, where it also faces possible diesel bans in some smog-clogged inner cities, a prospect that has already depressed resale prices to the chagrin of millions of owners of diesel vehicles.
"We are convinced that, with Diess, we have the right man on board", works council chief Bernd Osterloh said in a letter to employees on Friday.
Analysts welcomed the appointment of Diess, a former BMW executive who has more than doubled profitability at the VW brand since taking charge in 2015. "But, as is well known, that issue was laid to rest a long time ago".