China: Dongfeng has new chairman as merger reports soar image

One of the largest state-owned automakers, Dongfeng Motor, which has been implicated in numerous merger reports with Chinese rival FAW Group, has just announced a local Communist Party leader has been named as its new chairman.

Dongfeng is internationally known for its decision to acquire a 14 percent stake in its French partner PSA Peugeot Citroen as part of a larger salvage plan that also saw the French government and the Peugeot founding family have matching holdings. Dongfeng Motor, which is the parent of Dongfeng Motor Group, has a series of joint ventures in China with Nissan and Honda. Now, Jilin province Vice Party Secretary Zhu Yanfeng has been named as the successor to the current chairman, Xu Ping. The statement from the company announcing the nomination only said Xu would have other duties, but reports coming from Reuters put him next in charge as chairman of FAW, a company that has joint ventures with the first and second global leaders – Japan’s Toyota and Germany’s Volkswagen AG. And, to make all the matters more intertwined, Zhu is the ex president of FAW.

Also, because of the numerous merger reports covering Dongfeng and FAW, yesterday both companies decided to halt share trading on the Chinese stock exchange – later on Dongfeng Motor Group restarted them, claiming there was no government information on a possible merger. Still, Dongfeng Automobile, FAW Car and Tianjin FAW Xiali Automobile remained untradeable. The switch at the top ranks of the two major Chinese automakers also comes amid troubled times for FAW. Its current group chairman has been under a probe for allegedly “violating party discipline” – which usually translates into corruption accusations.

Via Reuters