China's second largest carmaker Dongfeng said on Wednesday that its chairman was being replaced but denied a rumoured merger with another auto giant, China FAW Group.

Dongfeng Motor Corp. said Xu Ping would step down as both chairman and Communist Party chief of the state-owned company.

He will be replaced by Zhu Yanfeng, a former chairman of FAW, according to a statement.

Zhu was most recently the deputy party chief of the northeastern province of Jilin. He was chairman of FAW -- China's third biggest auto manufacturer -- from 1999 to 2007, according to state media.

The statement gave no reason for Xu's departure but said the decision was made by the ruling party and the State Council, or cabinet.

The Chinese government controls the management of major state-owned enterprises, with power to shuffle their heads at will.

Dongfeng, the country's second-biggest automaker by sales last year, has several joint ventures with foreign manufacturers. It is also a shareholder in France's PSA Peugeot Citroen.

A China-based spokeswoman for PSA Peugeot Citroen told AFP: "We do not believe this will change the relationship."

Dongfeng's listed unit denied media reports that a merger between its parent and FAW was in the works.

"Neither the company nor its controlling shareholder has received any information... on the above-mentioned matters from any governmental authorities, or expressed any relevant intention to any authorities," Dongfeng Motor Group Co. said in a separate statement to the Hong Kong stock exchange on Tuesday.

It added that the company's board had not studied any such merger.

The leadership change at Dongfeng comes just two days after China named new heads of its three biggest energy companies: China National Petroleum Corp., Sinopec and offshore oil firm CNOOC.

Speculation about mergers among China's major state-owned enterprises has grown after state media said the government was considering merging scores of its biggest state firms to create around 40 national champions from the existing 112.

The government agency that manages those enterprises, the State-owned Assets Supervision and Administration Commission, has denied those reports.

Dongfeng Motor stock closed up 1.10 percent in Hong Kong trading on Wednesday.