FAW, Dongfeng to Trade Two Executives

(Beijing) — Two of China’s largest state-owned automakers will exchange top-level executives in what is seen as a routine move, people with knowledge of the matter said.

The general manager of FAW Car Co. Ltd., An Tiecheng, will become deputy general manager of Dongfeng Motor Corp., the source who requested anonymity said. Dongfeng’s subsidiary, Dongfeng Motor Group, will send its vice president, Qiu Xiandong, to FAW Group to become deputy general manager of FAW Group, the parent of FAW Car Co., according to the source.

The personnel change will be announced in early April by the State-Owned Assets Supervision and Administration Commission, which oversees all state-owned enterprises (SOEs), the source told Caixin.

Mutual transfers of executives between SOEs is common, and aims to enhance industrywide co-operation and avoid corruption. The exchange between FAW and Dongfeng makes sense because they are the only SOEs in the auto sector, a person close to FAW told Caixin on grounds of anonymity.

This will be the second such exchange of personnel within the top management ranks of the two carmakers. In May 2015, Dongfeng President Xu Ping was appointed FAW Group’s president. Zhu Yanfeng, a former head of FAW group who was serving as a government official at the time, took the reins of Dongfeng.

Such transfers in the past had also preceded possible mergers in some cases. For example, the former chairman of China Nuclear Engineering & Construction Corp., Wang Shoujun, in December was appointed the head of a rival and another state-backed company, China National Nuclear Corp., months before announcing a possible merger between the two.

Rumors of a merger between Dongfeng and FAW has been floating around for nearly two years, ever since both companies temporarily halted the trading of their respective shares for a few days in May 2015.

But Dongfeng President Zhu denied these rumors on Wednesday at a news briefing to announce the company’s annual results. He said the two companies have had “no discussions or plans” apart from technology collaboration.

In February, the two agreed to establish a research center, with a focus on cell engines, light-weight technology and talent training.

Dongfeng has tie-ups with Renault-Nissan, Honda and PSA Peugeot Citroën. FAW, meanwhile, has car and commercial vehicle partnerships with the world’s three biggest carmakers by sales — Toyota, Volkswagen and General Motors.

Contact reporter Coco Feng (renkefeng@caixin.com)