BEIJING (Reuters) -- Chinese state-owned automaker Dongfeng Motor, which has a 14 percent stake in PSA, has appointed a former president of FAW Group, Zhu Yanfeng, as its new chairman amid reports that the government is preparing to merge it with FAW, a joint venture partner of Volkswagen.
Dongfeng said Zhu, who is Jilin province vice party secretary, would replace current chairman Xu Ping.
Dongfeng said Xu would be appointed to another position but did not say what the new post would be. Xu will become the chairman of FAW, a person with knowledge of the matter told Reuters.
A FAW spokesman declined to comment.
China's central government generally directs leadership changes at state-owned companies.
"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.
Dongfeng and FAW are subject to the Chinese government's efforts to restructure inefficient state firms and have also been targeted in President Xi Jinping's effort to crack down on corruption.