UPDATE 1-German auto lobby picks utilities expert to take the wheel

Germany's powerful VDA car industry association has appointed Hildegard Mueller, a former conservative politician, and utility lobbyist, as its new president from Feb. 1.

Mueller, who had been tipped for the job, will take over as German automakers face slowing global demand and costly investments in electric and self-driving vehicles to keep pace with new competitors such as Tesla, Google, and Uber. The 52-year-old, who was a member of the German parliament from 2002 to 2008, was elected unanimously by VDA's executive board, it said in a statement.

"Hildegard Mueller is a great choice," said Oliver Blume, chief executive of Volkswagen's Porsche business. "Germany's car industry faces big challenges. With her experience in industry, politics and association work, she is a professional partner to open up opportunities and to take on social responsibility."

Mueller replaces Bernhard Mattes, who retires at the end of the year. Tougher emissions rules and the shift to electric vehicles are top of the agenda for the industry, as well as clearing up the aftershocks of Volkswagen's "dieselgate" scandal when it admitted to cheating U.S. diesel emissions tests in 2015.

Mueller has not previously worked in the car industry, one of Germany's major employers and export drivers. But she is said to be close to Chancellor Angela Merkel, for whom she served as a minister of state at the Chancellery between 2005 and 2008.

She is also close to the energy sector, having run BDEW, the Berlin-based utility industry association, between 2008 and 2016 as managing director. This was prior to joining energy group Innogy, where she was responsible for grids, digital network expansion and electric car (EV) charging infrastructure.

Germany's local power grid infrastructure is old and centralized. Mueller has argued it needs to be more flexible and digitally-equipped to support the mass roll-out of EVs by, for example, integrating home storage batteries. Mueller said in a statement that Germany's auto industry had shown it could adapt to change, a quality needed to stay on top.

"With an offering that combines climate protection with digitization, in order to offer even more comfortable and safe vehicles, the German automotive industry will be able to continue setting worldwide standards," she said.

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