VW Names Daimler Compliance Manager To Help Tackle Scandal

FRANKFURT , Germany (Reuters) -- Volkswagen named Daimler manager Christine Hohmann-Dennhardt on Friday to the newly created post of board member for integrity and legal affairs, as it strives to recover from the scandal over its cheating of diesel emissions tests.

Europe's biggest carmaker said Hohmann-Dennhardt, who has held the same position at German rival Daimler since 2011, would start her new job on Jan. 1, 2016.

VW also said group sales fell 1.5 percent in September from the same month last year. That marked an improvement from a 5.4 percent drop in August and would have seen little impact from the test-cheating scandal, which only came to light in the second half of September.

VW admitted on Sept. 18 it used illegal software to manipulate emissions tests on diesel vehicles in the United States, sparking the biggest business crisis in its history.

The admission has wiped about a quarter off its stock market value, forced out its long-time chief executive and sparked investigations and lawsuits across the world.

Daimler said it had agreed to release Hohmann-Dennhardt from her contract early.

"Daimler is helping VW rebuild trust in the German car industry," said Ferdinand Dudenhoeffer, head of the Center of Automotive Research at the University of Duisburg-Essen.

"It's an important step to help VW clean up the affair."

Though VW has recruited outsiders to senior jobs before, it has a strong tradition of promoting from within and has come under fire from some investors for appointing company veterans as its new CEO and chairman in the wake of the test-cheating scandal.

Before joining Daimler, Hohmann-Dennhardt, 65, was a judge of the federal constitutional court. Prior to that, she held position in the German state of Hesse including minister of science and the arts and minister of justice.

Earlier on Friday, VW promoted Lars-Henner Santelmann to be the new head of its finance arm, Volkswagen Financial Services.

Santelmann, who joined VW in 1988, succeeds Frank Witter who was recently appointed as VW's new chief financial officer.

Breaking down its September sales figures, VW said group sales rose 4.7 percent in western Europe and 7.3 percent in the United States, offset by a 0.8 percent decline inChina, a 26 percent drop in Russia and a 44 percent plunge in Brazil.

(Reporting by Georgina Prodhan and Arno Schuetze; Editing by Harro ten Wolde and Mark Potter)