By Natalia Drozdiak
FRANKFURT--A reshuffling of top management at Volkswagen AG and
BMW AG signal that the long-awaited changing of the guard in the
German car industry is getting underway.
BMW AG, the world's leading premium car maker, said Tuesday that
Chief Executive Norbert Reithofer would step down in May, a year
before his contract expires.
Meanwhile, Volkswagen CEO Martin Winterkorn is ceding control of
the company's biggest business, the namesake VW brand, a move that
looks like a first step in choosing a successor to take the helm at
Europe's biggest automotive group in 2016.
Mr. Reithofer will be succeeded by Harald Krüger, BMW's
49-year-old production chief, who will become the youngest CEO of
any major car maker. BMW's controlling Quandt family said the move
signaled a "generational change" that would help BMW meet the
challenges posed by sweeping technology and consumer changes.
Separately, Volkswagen announced that Herbert Diess, a
56-year-old senior BMW executive, will become CEO of the VW brand
in October and join Volkswagen's executive management board.
Mr. Winterkorn is currently in charge of both the Volkswagen
group and the VW brand, a balancing act that has become
increasingly difficult to manage.
From January to November, VW brand sales grew 2% to 5.59 million
vehicles, driven largely a 12% increase in China. But sales in the
U.S., Russia and Brazil declined and monthly data show a drop in
China sales from November a year ago, which analysts said marked
the first time VW's sales in China declined.
Recharging the VW brand will now be up to Mr. Diess. If he
succeeds, he is likely to become a strong candidate to take the
reins from Mr. Winterkorn as CEO when his term expires in 2016.
Mr. Diess is the second senior executive that Volkswagen has
poached from one of its main rivals. Earlier this year the company
hired former Daimler executive Andreas Renschler to run its truck
business beginning next year.
Mr. Diess was disappointed at being passed over for BMW's top
job, according to people familiar with the situation. One person
said he was never a candidate because of his age.
"Krüger was always the crown prince," this person said.
The appointments give Volkswagen intimate knowledge of the plans
of two of its main rivals at a time when VW's Audi, Daimler's
Mercedes-Benz, and BMW are running a tight race for leadership of
the premium car market.
By the end of November, Audi sold 1.59 million cars world-wide,
surpassing full-year sales of 1.57 million in 2013. "We've never
been so close to being number one," Luca de Meo, Audi's sales
chief, told reporters in Berlin.
Mr. Reithofer has had a successful run since taking charge of
BMW in 2006, pulling BMW past Mercedes, boosting profitability,
expanding into China and launching the company's first
battery-powered vehicles.
BMW's lead on its rivals has narrowed, but the decision to
replace him a year early may have more to do with securing his
position as head of the supervisory board than a belief that he has
lost his mojo.
Under a new German law, women must fill at least 30% of the
seats on the non-executive supervisory boards of German companies
beginning in 2016. For BMW that means two supervisory board seats
need to be filled by women, which would have prevented Mr.
Reithofer from becoming chairman of the supervisory board as
planned in 2016.
"Reithofer was always seen for this post," said a person
familiar with the situation. "One reason this decision was made was
to ensure that Reithofer becomes chairman."
There is still no clear sense when Daimler CEO Dieter Zetsche
plans to retire. Mr. Zetsche overcame a rough patch last year and
had his contract extended three years to the end of 2016. It isn't
clear if he wants to stay on for another term or make way for a
successor.
The person most often mentioned as a successor to Mr. Zetsche is
Wolfgang Bernhard, who now runs Daimler's truck business but has a
wide range of experience with Daimler's car businesses, Mercedes
and AMG. He also ran the VW brand for a short time before leaving
in 2006 to return to Daimler.
Neetha Mahadevan and Ilka Kopplin contributed to this
article.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
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