Volkswagen to replace CEO as it tries to make a clean break from its diesel emissions scandal

  • Volkswagen plans to replace CEO Matthias Mueller with the head of its core brand, Herbert Diess, CNBC has learned.
  • Mueller's expected departure represents an attempt to make a clean break from the diesel emissions scandal and shows the automaker's struggles as it has tried to move beyond it, sources said.
Volkswagen CEO Matthias Mueller addresses a news conference at Volkswagen's headquarters in Wolfsburg, Germany, on September 25, 2015.
Fabian Bimmer | Reuters
Volkswagen CEO Matthias Mueller addresses a news conference at Volkswagen's headquarters in Wolfsburg, Germany, on September 25, 2015.

Volkswagen plans to replace CEO Matthias Mueller as the German automaker takes another step to move past the lingering effects of its 2015 diesel emissions scandal, according to sources familiar with the automaker's plans.

Mueller will be replaced by Herbert Diess, who currently runs the Volkswagen brand, CNBC has learned. Diess, 59, joined Volkswagen in July 2015, after previously working at BMW.

Volkswagen issued a statement saying, "...the Chairman of the Supervisory Board of Volkswagen is currently in discussions with certain members of the Supervisory Board and of the Board of Management. Mr. Matthias Müller showed his general willingness to contribute to the changes."

Mueller's departure represents an attempt to make a clean break from the diesel emissions scandal and shows the automaker's struggles as it has tried to move beyond it, sources said. While Mueller was never charged or formally linked to the scheme to rig the emissions of certain diesel engines, there has been plenty of speculation in Germany that Mueller and other executives were slow to act as the public started to learn about the scandal. Those questions, along with Mueller's inability to lay out a clear vision for Volkswagen's future, have been two issues hurting his tenure as CEO.

Meanwhile, Diess has been praised for his public stance that Volkswagen needs to change and evolve. Since taking over the VW brand in late 2015, Diess has not been afraid to take on powerful labor unions in Germany as he has pushed the automaker to cut costs.

"He's been able to articulate how Volkswagen moves forward," said one VW executive who talked with CNBC on the condition he not be named.

Diess has overseen a steady rise in Volkswagen brand sales. In the first quarter, VW brand global sales hit a record high of 1.52 million vehicles, including growth of 8.3 percent in China, the brand's biggest market.