Volkswagen puts Herbert Diess in the driving seat

Herbert Diess is known for his cost-cutting measures

Volkswagen has replaced its chief executive 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.

Mr Diess has clashed with unions and is known for his cost-cutting measures.

The move is part of sweeping changes announced by the German company, which also owns several other brands including Audi and Porsche.

The carmaker said it will reorganise its 12 brands by creating six new vehicle divisions and a special arm devoted to China, its largest market.

More details about the restructuring are expected to be revealed at a press conference at VW's Wolfsburg headquarters on Friday morning.

The management shake-up signals VW's desire to move forward from the emissions scandal and press on with its "Strategy 2025" plan to build greener vehicles.

Mr Mueller had been running Porsche before being elevated to replace Martin Winterkorn as VW chief.

He has presided over a wide ranging restructuring of the company and its other brands.

Matthias Mueller had done "outstanding work" VW's chairman said

However, in May 2017 prosecutors in Stuttgart said they were investigating Mr Mueller over suspicions he may have known about the diesel cheating before it became public.

The scandal, in which VW installed emissions-cheating software in 11 million vehicles worldwide, has cost the firm at least $30bn (£22.4bn) in fines and other costs.

As well as cars, the VW empire spans motorbikes, bus, and truck operations. Its brands also include Bentley, Scania, Skoda and Ducati.

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VW chairman Hans Dieter Poetsch said in a statement that Mr Mueller had done "outstanding work" for the company.

The statement continued: "He assumed the chairmanship of the board of management in the fall of 2015 when the company faced the greatest challenge in its history.

"Not only did he safely navigate Volkswagen through that time, together with his team, he also fundamentally realigned the group's strategy."

'Man of action'

However, Mr Mueller was seen by critics as having failed to refocus the group's portfolio of brands, a key pillar of "Strategy 2025" to transform the company into a leader in cleaner cars after the diesel scandal.

Some analysts cheered the appointment of Mr Diess.

"Diess is a man of action, he is the most plausible choice at VW to lead the group into the next phase of its transformation," said Nord LB analyst Frank Schwope.

VW also announced that works council executive Gunnar Kilian would replace Karlheinz Blessing as human resources chief.

And the chief executive of Porsche, Oliver Blume, will join the main VW board.