BERLIN/HAMBURG — Volkswagen is seeking to replace Chief Executive Matthias Mueller with the head of its core VW brand, Herbert Diess, as part of a broader overhaul of its management structure to boost efficiency, two people familiar with the matter said.

VW, still struggling to put its 2015 diesel emissions scandal behind it, said earlier on Tuesday it could replace Mueller as part of a management revamp. The shares jumped on the news and were up 4 percent at over 170 euros.

It is unclear how soon Diess, a former BMW executive who joined VW in July 2015, would replace Mueller.

The contract of Mueller, 64, who took the reins at VW a week after the "dieselgate" scandal broke in September 2015, runs out in 2020. The move would come as something of a surprise, as the board last month authorized a 40 percent pay raise for Mueller based on the Volkswagen Group's 2017 performance, in which it nearly doubled its operating profit.

"Volkswagen considers a further development of the management structure of the group which would also be associated with personnel changes in the board of management," VW said in its statement.

Two people close to the carmaker said that VW's supervisory board was due to meet on Friday and would also discuss efforts to pave the way for the IPO of VW's truck and bus division.

Europe's largest automotive group has been considering measures to make itself more nimble, including carving out truck operations via a stock sale, as it spends billions of euros on electric cars and new mobility services.

It is attempting to emerge from the damaging and costly diesel emissions scandal, the scope of which was recently demonstrated in aerial photos showing hundreds of thousands of cars the automaker had bought back and parked en masse throughout the U.S. The brand's image took another hit earlier this year when news emerged that it had authorized laboratory tests in which monkeys were forced to breathe diesel fumes.

Diess, 59, has been pushing restructuring at the VW brand and repeatedly clashed with powerful labor unions over cost reductions.

Mueller's likely departure comes two days after Deutsche Bank dismissed CEO John Cryan in search for profit and change, replacing him with retail banking chief Christian Sewing.

"If Diess is confirmed as the successor, VW shares will extend their gains," Evercore ISI analyst Arndt Ellinghorst said, who has an "outperform" rating on the stock. "We see no better alternative to Matthias Mueller to make the company fit for the future."

The management upheaval contrasts with a strong operating performance at the carmaker which last year posted record auto sales and profit.

But the persistent tug of war between VW's controlling families, unions and stakeholders have made it difficult to effect structural change that investors have said is key to VW fulfilling its potential.

Mueller had expressed his general willingness to participate in the changes, VW said on Tuesday, but added that it was still to be determined whether efforts to develop a new leadership structure would leave him in place. Chairman Hans Dieter Poetsch is currently in talks about changing the structure with fellow supervisory board members and members of the management board, VW said.

Two months ago, sources close to the top management of VW told Reuters that Mueller was growing frustrated with a lack of support for his reform efforts and by the company's inability to draw a line under its emissions scandal.

Volkswagen declined to comment on whether the board was poised to name Diess as new CEO. The works council, whose members occupy half the seats on the supervisory board, also declined comment.

Reporting by Andreas Cremer and Jan Schwartz

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