ONE of China’s biggest State-owned automakers, Dongfeng Motor Corp., said yesterday a provincial Communist Party official would become its new chairman amid media reports the government was preparing to merge it with peer China FAW Group Corp.

    Dongfeng Motor, the parent of Dongfeng Motor Group Co. and which has joint ventures with Nissan Motor Co. and Honda Motor Co. in China, said Zhu Yanfeng, vice Party secretary of Jilin Province, would replace current chairman Xu Ping.

    In its statement, Dongfeng said Xu would be appointed to another position, and a person with knowledge of the matter said that Xu was now poised to become the chairman of FAW, which has joint ventures with Volkswagen AG and Toyota Motor Corp.

    Zhu is former president at FAW. News of his appointment comes a day after Dongfeng and FAW temporarily suspended trading in the shares of their listed units to check into domestic media reports that said the companies were merging.

    Dongfeng Motor Group Co. resumed trading Tuesday, saying it had not received any information from the authorities about a merger, but Dongfeng Automobile Co., FAW Car Co. and Tianjin FAW Xiali Automobile Co. remained halted.

    The government generally directs leadership changes and restructuring at major State-controlled firms.

    “The purpose of the leadership exchange is to rebuild and revive FAW, which has been in trouble lately,” the person with knowledge of the matter said, declining to be named as all the changes had yet to be announced.

    FAW Group chairman Xu Jianyi is under investigation for “violating Party discipline,” a euphemism for corruption, the Communist Party’s lead disciplinary agency said in March. (SD-Agencies)