ferdinand piech

Martin Winterkorn may have survived an attempted leadership coup in April, which pitted third-generation chairman against non-family executive, but the Volkswagen CEO did not prove so resilient in the face of the corporate scandal currently rocking the carmaker.

Today the family business is reportedly set to announce that Matthias Mueller, who current heads the company’s luxury Porsche brand, will take over the entire group.

Winterkorn had worked at Volkswagen since 1993, serving as CEO for the last eight years.

Ferdinand Piech, chair of family-controlled Volkswagen, has hinted he could stay at the carmaker for another five to seven years, despite being 75 years old.

In April, VW shareholders voted for Piech to serve a third term as chairman, to end in December 2016. But in an interview with German newspaper Bild am Sonntag last week, Piech, whose family holds a majority stake in VW, said he wanted to stay around longer to support chief executive Martin Winterkorn.

Family-controlled German carmakers, Porsche and Volkswagen, announced on 23 February that their planned merger may not happen this year due to pending legal issues.

The two carmakers had previously revealed plans to merge by the second half of this year, but unresolved legal issues relating to a failed takeover of VW by Porsche in 2008 are likely to delay the merger.

The Supervisory Boards of Porsche SE and Volkswagen AG announced on Friday they have taken a further step towards integration when both boards approved the contracts of a merger deal that would see the two companies combined by 2011.

VW was the first to announce that its board had agreed to the terms of the merger and its statement was soon followed by a similar one from Porsche. The next step in the process will see VW take a 49.9% stake in Porsche before the end of 2009 in a deal worth €3.9 billion.