GAC Group, one of China's largest state-owned automakers, said it plans to acquire part of a vehicle joint venture held by China FAW Group, a move that would give FAW a strategic stake in GAC in return. The company's A-shares have been suspended from trading since Sept. 14, 2026, according to a statement cited by PCauto.
GAC said it signed a letter of intent with FAW to buy a portion of the equity in an unnamed vehicle joint venture owned by FAW, using newly issued shares as payment, and to raise matching funds. The transaction is expected to constitute a major asset restructuring and a related-party transaction, but it will not change GAC's actual controller or constitute a backdoor listing, the company said.
If the deal is completed, FAW would become GAC's second-largest shareholder and hold a strategic influence over the company, GAC said. The suspension is expected to last no more than 10 trading days, during which GAC said it will push forward with the work and disclose a restructuring plan approved by its board before asking for the shares to resume trading.
What the deal means
The move marks a rare equity tie-up between two of China's "Big Four" state-owned auto groups, which have traditionally operated independently. GAC is best known for its joint ventures with Honda and Toyota, as well as its own Aion brand of battery-electric vehicles (BEVs). FAW, based in Changchun, is the parent of Hongqi and operates joint ventures with Volkswagen and Toyota.
Details of which joint venture is involved were not disclosed in the statement. FAW's vehicle joint ventures include FAW-Volkswagen, which builds VW and Audi models, and FAW Toyota. A stake in either would give GAC access to additional production capacity and model portfolios, though analysts note the strategic rationale may also involve consolidating state-owned auto assets as China's industry faces overcapacity and a price war.
GAC's own sales have struggled recently, with its Aion BEV brand facing intense competition from BYD and other rivals. The company has also been expanding its presence in plug-in hybrid (PHEV) and range-extender (EREV) segments, where it has launched new models under the Aion and Trumpchi brands.
Regulatory context
The deal will require approval from Chinese securities regulators and is subject to further due diligence. GAC warned investors to watch for follow-up announcements and to be aware of investment risks. The company did not provide a timeline for completing the transaction beyond the suspension period.
PCauto, the Chinese automotive media outlet that reported the announcement, noted that the restructuring could reshape the competitive landscape among China's state-owned automakers, which have been under pressure to improve efficiency and reduce duplication as the market shifts to electric vehicles.
