GAC Group has taken a major step toward consolidating Toyota's two Chinese joint ventures. On September 28, the Guangzhou-based automaker announced it would issue shares to acquire the 50% stake in FAW Toyota currently held by FAW Group's listed arm, FAW Co., with a proposed issue price of 5.75 yuan per share. The move follows a September 14 disclosure of the intended transaction, according to Chinese business outlet Huxiu.
If completed, GAC would hold half of both FAW Toyota and GAC Toyota, while FAW would become GAC's second-largest shareholder through its stake in the share issue. The Guangzhou State-owned Assets Supervision and Administration Commission would remain GAC's actual controller. The deal gives a concrete shape to Beijing's push for consolidation and cross-regional restructuring among automakers. Combined 2025 sales of FAW and GAC exceed 5 million vehicles, more than BYD and SAIC together.
Why GAC needs the deal
GAC is under financial pressure. In the first half of this year, it posted a net loss attributable to shareholders of 4.467 billion yuan (about $629 million). Investment income from its joint ventures fell to 1.326 billion yuan (about $187 million) from 1.923 billion yuan a year earlier. GAC Honda sales dropped 51.81% in the first eight months, while GAC Toyota fell 2.46%. FAW Toyota, by contrast, remains profitable, with net profit of 4.234 billion yuan (about $596 million) in 2025 and 1.009 billion yuan (about $142 million) in the first half of this year.
Li Yanwei, a member of the expert committee of the China Automobile Dealers Association, told Huxiu that the deal could help GAC coordinate production capacity, technology investment, supply-chain bargaining and overseas projects at a higher level of state capital. He noted FAW has deep strength in manufacturing and government sales but lacks competitive BEV (battery-electric) products and internet-style operations, while GAC brings BEV development, a South China supply base and experience closer to consumer-focused new-energy companies.
Brand overlap and reform challenges
GAC's own brands - Trumpchi, Aion, Hyper and the new Qijing - have lost momentum to startups and other state-owned newcomers. Chairman Feng Xingya has admitted the brands target too broad an audience and lack distinct positioning. With FAW's Hongqi and Bestune brands in the mix, overlapping price bands and models could offset the benefits of shared platforms unless brands are trimmed, Li cautioned.
Feng, who took over as chairman in late 2024, has pushed a sweeping reform called the Panyu Action, aiming for self-owned brands to account for over 60% of group sales by 2027 and exceed 2 million units. He has shortened product development cycles from 30 months to 18-24 months and merged Hyper and Aion into one business unit. GAC has also partnered with Huawei and Momenta on assisted driving, with the Hyper A800 and Qijing GT7 already using Huawei's Qiankun system and Harmony cockpit.
For the joint ventures, Feng plans to accelerate new-energy offerings and bring "same intelligence for petrol and electric" vehicles, a strategy for 2026. GAC Toyota launched the Bozhi 7 in March with a Huawei cockpit and Momenta assisted-driving system. Overseas, GAC aims to double exports this year, having sold 172,000 vehicles abroad in the first eight months, up 136%.
The transaction still faces multiple approvals, including state-asset review, shareholder votes and securities regulators. Auditing and valuation are incomplete, and the final price and share count remain undetermined. Whether the deal can put GAC back on the fast track, as Huxiu asks, depends on execution of the broader restructuring.
