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VW Veteran Tapped for North America Job Quits

FILE - Skoda Chairman Winfried Vahland poses with a new Skoda Octavia car in this March 20, 2013 photo.

The man Volkswagen lined up less than three weeks ago to head its North American business is leaving the German carmaker, dealing a blow to its efforts to recover from the scandal over its cheating of diesel emissions tests.

Winfried Vahland, currently chief executive of Czech division Skoda, will leave after more than 25 years at Europe's biggest carmaker, Skoda said on Wednesday, confirming what sources close to the matter had earlier told Reuters.

Not tied to diesel scandal

Skoda said in a statement Vahland, who previously led Volkswagen's rapid expansion in China, was leaving at his own choice due to differences of opinion over the company's organisation of its North American business.

"This decision is expressly not connected to the current events around the diesel topic," the statement said.

German weekly Auto Bild earlier reported Vahland's pending departure, noting he was passed over for the top job at Volkswagen after Chief Executive Martin Winterkorn resigned on Sept. 23.

"Vahland was a good manager," said London-based Evercore ISI analyst Arndt Ellinghorst. "VW is facing massive challenges and a completely new start.”

Volkswagen is battling the biggest business crisis in its 78-year history after admitting last month it installed software in diesel vehicles to deceive U.S. regulators about the true level of their toxic emissions.

The scandal has wiped about a quarter off its market value and rocked both the global car industry and the German economy.

The company had appointed 58-year-old Vahland to join the management of its core VW brand on Nov. 1 as head of its operations in the United States, Mexico and Canada as part of a broader reshuffle that led to Porsche CEO Matthias Mueller taking the helm of the group.

Sources had told Reuters that Vahland was also the favourite to get a new management board position to oversee the group's struggling North American operations.

While facing dozens of public and private lawsuits, government investigations, compensation and recall expenses, Volkswagen needs to rebuild trust with U.S. customers as it tackles a chronic underperformance in the world's second-largest auto market, analysts have said.