Dongfeng and FAW Group are the subject of rumour mergers in China following senior management changes that also provoked halts to share trading of publicly listed subsidiaries of the two state-owned companies.
The China Daily newspaper reported that local media reported the appointment of new chairmen for both companies causing their share prices to surge beyond the 10% daily limit triggering the trading halts.
Rumours of a merger between the two carmakers gathered pace following reports citing insiders that Xu Ping, 58, Chairman of Dongfeng, is to fill FAW’s chairman vacancy soon. FAW’s former chairman Xu Jianyi has been under investigation for corruption since March 15, the China Daily noted.
The Dongfeng’s chairman position would be taken over by Zhu Yanfeng, the 54-year-old deputy secretary of the CPC Jilin Provincial Committee, according to anonymous sources in the China Daily report.
Beijing is interested in encouraging industrial consolidation in the automotive sector, as well as leading an anti-corruption drive in the Chinese economy.
Both FAW and Dongfeng have a number of JVs with foreign automakers.