Diess is not satisfied with progress at Audi and wants the premium brand to achieve an operating margin of 12 percent long term, compared with 8.4 percent in 2017.

Without specifying its sources, Manager Magazin further said Porsche's investments in electric vehicle platforms have threatened its goal of reaching a margin of 15 percent between 2021 and 2022, leading to a clash between Porsche chief Oliver Blume and Diess.

The Volkswagen brand is being pushed by Diess to achieve a 6 percent margin target by 2020 or 2021, the magazine said.

Furthermore Diess is demanding that Seat takes around 1,000 euros in costs out of each vehicle they produce.

A spokesman for Volkswagen Group declined to comment.

(Reporting by Ilona Wissenbach; Writing by Edward Taylor; Editing by Alexandra Hudson)