Dongfeng Motor Corporation and FAW Group stated on Friday they will develop a joint innovation centre, a relocation that brings China’s 2 oldest car manufacturers together after they switched top executives in 2015.
Both signed an agreement on same day that will see them work together in five areas consisting of fuel cell technology, wise connectivity and testing centers. The companies did not reveal financial terms.
In 2015, previous FAW president Zhu Yanfeng replaced Dongfeng’s chairman Xu Ping, who was then named the chairman of FAW Group.
The relocation triggered large speculation that the two companies could merge, sending up shares of listed subsidiaries FAW Automobile and Tianjin FAW Xiali Automobile.
The companies have struggled to develop independent brands that can take on foreign manufacturers, although both have highly profitable joint ventures with worldwide automakers.
FAW has joint ventures with Toyota Motor and Volkswagen AG, where as Dongfeng has JVs with Honda Motor and Nissan Motor.
