The Skoda and Seat brands fear they will lose influence because Volkswagen Group CEO Herbert Diess plans to step down as head of their supervisory boards, a German paper reported.
Diess will step aside to focus on building up a stronger software development team, Handelsblatt reported.
Reuters also said Diess would step down as chairman of the two VW Group subsidiaries, quoting a person familiar with the matter.
Handelsblatt said managers at Skoda and Seat were concerned that Diess's withdrawal would mean there will less focus on the two brands within VW Group, downgrading their status.
VW Group is seeking cost savings to help fund its massive software and electric-vehicle investments and wants to more closely align Skoda and Seat with its core VW brand to reduce overlaps.
In the past, VW brand's labor leaders have said Skoda has an unfair price advantage because it can keep costs low because by using technology developed by VW brand.
Diess and top VW Group executives have said they want to manage brand identities more clearly in future.
At Seat, Diess would be succeeded by current technology head Thomas Schmall and at Skoda by Murat Aksel, head of procurement on the Volkswagen board, Reuters reported.