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Volkswagen Appoints Herbert Diess To Succeed Matthias Mueller As CEO

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Volkswagen AG (VKW.L,VLKAF.PK,VOW.BE) said Thursday that it replaced its chief executive officer with Herbert Diess, who takes on responsibility for the entire company after overseeing the VW brand. He takes over from Matthias Mueller, who was appointed in 2015 at the height of the diesel emissions scandal.

The company said it will reorganize its 12 brands by creating six new vehicle divisions and a special arm devoted to China.

It is expected that more details about the restructuring to be announced at a press conference at VW's Wolfsburg headquarters on Friday morning.

Volkswagen said in statement, "In order to sustainably implement the new structure, there will be a number of changes on the Board of Management. Matthias Müller steps down as Chairman of the Board of Management by mutual agreement, effective immediately. At its meeting on Thursday, the Supervisory Board appointed Dr. Herbert Diess as his successor."

Chairman of the Supervisory Board Hans Dieter Pötsch expressly thanked Müller for his dedication: "Matthias Müller has done outstanding work for the Volkswagen Group. He assumed the chairmanship of the Board of Management in the fall of 2015 when the Company faced the greatest challenge in its history.."

Volkswagen said it has introduced the brand groups Volume, Premium and Super Premium, along with the planned preparation for capital market readiness of Truck & Bus, created the basis for a more subsidiary leadership of the Group. The Chairmen of the Board of Management responsible for the brand groups will be taking on additional Group management roles. Following this reorganization, Herbert Diess PAGE 2 OF 3will be responsible for Group Development and Research, Rupert Stadler for Group Sales, and OliverBlume for Group Production.

Due to the special significance of vehicle connectivity, Vehicle IT will be led by Herbert Diess himself; Company IT will be headed by Frank Witter. Procurement and Components are to be combined into one unit going forward.

"Herbert Diess is the right manager to do that. In realigning the Volkswagen brand, he has demonstrated to impressive effect the speed and rigor with which he can implement radical transformation processes. This accomplishment makes him predestined to fully implement our Strategy 2025 in the decisive years that are now to follow," Pötsch said.

At its meeting today, the Supervisory Board also decided on two new appointments to the Group Board of Management. Dr. Oliver Blume, Chairman of the Board of Management at Porsche, will belong to the Group's top governing body going forward.

In addition, Gunnar Kilian, who until now has served as Secretary-General of the Volkswagen GroupWorks Council, has been appointed the new member of the Group Board of Management for HumanResources. He takes over the post from Dr. Karlheinz Blessing, who served in the role from thebeginning of 2016. Dr. Blessing will be leaving the Board of Management by mutual agreement, butremains available to the Company in a consultative capacity for the remaining duration of hisemployment contract.

Francisco Javier Garcia Sanz, head of Procurement, leaves the Company at his own request. Ralf Brandstätter, Board of Management member responsible for Procurement for the VW brand, will take on this additional role provisionally.

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