GAC Group (SH:601238; HK:02238) suspended trading on September 15, 2026, citing plans for a major asset restructuring. The company has signed an intent agreement with FAW to issue new shares in exchange for FAW's stake in a joint venture, with FAW set to become GAC's second-largest shareholder. According to Huxiu, speculation centers on the deal involving GAC Toyota, potentially merging the two Toyota joint ventures in China.
The move comes just days after China's National Development and Reform Commission voiced support for large automakers to pursue market-based mergers and restructuring. GAC's urgency reflects its deteriorating financial health, as its joint ventures with Honda and Toyota see sales plummet.
Joint Venture Decline
GAC's sales peaked in 2023 at 2.505 million units, but fell 20% to 2 million in 2024, and further to 1.72 million in 2025. In the first eight months of 2026, sales were just 1 million units, down 35% from the same period in 2023. The decline is driven by its two main joint ventures: GAC Honda and GAC Toyota, which together sold 1.59 million units in 2023 (63.5% of GAC's total), but only 1.11 million in 2025, and a mere 547,000 in the first eight months of 2026. GAC Honda alone sold only 92,000 units in those eight months, a three-quarter drop from 2023.
This mirrors the broader collapse of foreign-brand joint ventures in China. Their market share, which exceeded 60% before 2012 and still dominated as recently as 2020, fell to around 50% in 2022, 30% in 2025, and could drop to about 25% in 2026. The rise of domestic new-energy brands has fundamentally changed the competitive landscape.
Struggles of State-Owned Giants
GAC's predicament echoes that of SAIC Motor, which saw its sales peak at 7.05 million units in 2018, only to decline to 4.01 million by 2024. SAIC's joint ventures with Volkswagen and GM, which once accounted for nearly 60% of its sales, have seen their combined volume fall from 4.06 million units in 2017 to just 733,000 in the first eight months of 2026. SAIC's own brands, including Roewe, MG, and Wuling, have not been able to fill the gap, with their combined sales in 2025 still below 2017 levels.
For GAC, its own brands—Trumpchi and Aion—have grown but remain insufficient. In 2023, they accounted for 35.4% of GAC's sales, up from 17.3% in 2020, but the overall decline has overwhelmed this progress. The company's situation is so dire that it is seeking a lifeline through restructuring with FAW, a move that analysts see as a desperate attempt to adapt to a market where the old joint-venture model is no longer viable.
As Huxiu notes, the era of joint ventures is over, and merging the two Toyota ventures would not reverse the trend. The future for GAC and other state-owned automakers lies in their own brands and new-energy vehicles, but time is running out.
