The supervisory board of Europe's largest car-maker announced that, from next year, Audi will spearhead a family of 'sporty' brands while Volkswagen will head up a group comprising the Skoda, Bentley and Bugatti marques.
The board also confirmed an extensive re-shuffle of senior management ahead of current chairman Dr Ferdinand Piech's impending retirement in which Audi chief Dr Franz-Josef Paefgen was demoted to head of Rolls-Royce Bentley.
Piech will be succeeded by current SEAT chairman Dr Bernd Pischetsrieder, who is the architect of the new group brand structure.
Speaking at the launch of the new SEAT Ibiza in Barcelona, Pischetsrieder said the Audi-led Southern group would concentrate on building sporty, innovative products, while the Northern group would focus on more conservative vehicles.
He said the new arrangements would lead to efficiencies in the marques' back office functions but categorically denied that their vehicles would be sold alongside one another in the same showrooms.