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FAW Senior may adjust Xu Jianyi or replace Yan Yanfeng
When the FAW Pentium 6MT was unexpectedly priced low at the Guangzhou Auto Show, an insider revealed to a newspaper that top leadership changes might be on the horizon. Xu Jianyi, a member of the Standing Committee of the CPC Jilin Provincial Party Committee and Party Secretary of Jilin City, is expected to take over as general manager of FAW Group from Yan Yanfeng. “The appointment will soon be announced by year-end,†the source said.
The reporter contacted Gao Qing, director of the propaganda department of FAW Group, but he declined to comment on the matter. However, an internal source shared with the reporter, “This hasn’t been public news for a long time.â€
Industry analysts believe that as the youngest among the three major Chinese auto groups, Yan Yanfeng’s retirement may trigger further personnel adjustments. While it's uncertain how this change will affect the company, it's clear that his successor will inherit unresolved challenges in self-brand development and international expansion—issues that have long plagued China’s largest automaker.
Yan Yanfeng’s Nine-Year Tenure
Yan Yanfeng has been a well-known figure in the media and industry since 1999, when he took charge of FAW Group, known as the “King of the Republic.†The young leader quickly became a focal point of attention.
Three years ago, his statement about “Chinese cars needing to endure loneliness for 20 years†sparked controversy and became a temporary slogan. Yet, this experience helped solidify his position within the company.
Over the past nine years, under Yan’s leadership, FAW Group, once a state-owned enterprise from the Northeast, has undergone significant restructuring through mergers and partnerships. It has evolved into one of the strongest domestic automotive groups.
FAW now operates 30 wholly-owned subsidiaries and 18 holding companies, including FAW Jiefang, FAW Car, FAW-Volkswagen, and Tianjin FAW Toyota. With production bases across the country and a highly advanced technology center, FAW boasts total assets of 109.85 billion yuan and 133,300 employees.
In 2007, FAW ranked 385th on Fortune’s Global 500 list, with sales revenue reaching $18.71 billion. This marked the third consecutive year FAW had made the list, showing a notable improvement in rankings compared to previous years.
Despite these achievements, FAW’s own-brand development remains challenging. Although the company has invested heavily in brand building, its self-brands like Red Flag and Pentium still face difficulties in market penetration.
Yan Yanfeng was known for his strong determination to build a successful domestic brand. His wife was among the first users of the FAW Pentium sedan. He also rejected a Mercedes-Benz heavy truck joint venture, fearing it would dilute the value of the Liberation brand.
In recent years, Yan set a strategic plan to invest 13 billion yuan over eight years to strengthen FAW’s own brands. New models are expected to be launched annually.
As for his successor, industry insiders speculate that Yan may follow a similar path to Dongfeng President Miao Wei.
Succession Pressure
Xu Jianyi, currently a member of the CPC Jilin Provincial Party Committee, is the most likely candidate for the role. He previously served as Deputy General Manager of FAW Group. Another possible contender is Qin Huanming, former general manager of FAW-Volkswagen.
However, no matter who takes over, the pressure will be immense. FAW still struggles with self-brand development and internationalization.
Red Flag, with a brand value exceeding 5 billion yuan, has faced criticism despite its luxury positioning. The Pentium brand, while improved, still sells only around 2,000 units per month. At the Guangzhou Auto Show, the low-cost launch of the Pentium 6MT may provide some relief, but its impact remains uncertain.
Xiali, a key contributor to FAW’s own-brand sales, saw a sharp decline in 2007 due to reduced demand for small-displacement vehicles. Its net profit fell by 50-100% in the first three quarters compared to the same period in 2006.
Even in commercial vehicles, where FAW traditionally excels, it faces stiff competition. In January–October 2007, FAW Commercial Vehicles dropped to third place, with a market share half that of Beiqi Foton.
Internationally, FAW’s efforts have been limited. While there were rumors of a Red Flag factory abroad, the only recent development is a joint venture in Mexico. Fluctuating exports have not helped build a strong global reputation.
In contrast, SAIC Motor has successfully expanded overseas through acquisitions, such as Ssangyong. Its Roewe brand, though foreign-originated, has gained traction without facing the same brand criticism as FAW’s.
Financially, FAW lags behind SAIC. While FAW’s sales are competitive, its profit margin is only around 5%, compared to SAIC’s over 9%. Additionally, FAW’s profits rely heavily on Audi, making its financial structure less balanced.
Despite these challenges, FAW remains one of the most complete automotive enterprises in China, with a well-established industry chain. If resources are fully utilized, its strengths can still be leveraged. However, the pressure on the new leader will be greater than ever.