Volkswagen is to replace the leadership of its struggling Chinese operations as concerns mount that the business which has propped up the earnings of Europe's largest carmaker in recent years will slip to a heavy loss in 2005.

Winfried Vahland, vice-chairman of VW subsidiary Skoda, will take over at the beginning of July from Folker Weissgerber, the board member responsible for China, whose departure had already been announced, and Bernd Leissner, the head of China, who will retire.