GAC Group has unveiled a restructuring plan to acquire a 50% stake in FAW Toyota from FAW Group, a move that could reshape the competitive landscape of China's struggling joint-venture auto sector. The announcement, made on September 28, follows a 10-day trading suspension and confirms earlier speculation about a merger of the so-called 'North and South Toyota' ventures.
Under the plan, GAC will issue new shares to purchase the stake held by China FAW Group, along with a private placement to raise matching funds. Shares of GAC (601238.SH) will resume trading on September 29, 2026. According to a person familiar with the matter quoted by Time Weekly, the deal is not a traditional merger but a new form of strategic cooperation that uses capital as a bridge to remove barriers and focus on core business synergies.
FAW Toyota, a joint venture between FAW Group and Toyota Motor, operates plants in Tianjin, Changchun and Chengdu, plus engine factories. Together with GAC Toyota, it forms the 'North-South Toyota' dual-joint-venture structure that has been a pillar of Toyota's China strategy. The restructuring will enable GAC to hold both JVs, allowing coordinated product planning, parts procurement and marketing, as well as eventual integration of sales channels.
Joint Ventures Under Pressure
The move comes as traditional joint ventures face severe challenges in China's fast-electrifying market. Data from the China Passenger Car Association shows that domestic brands captured 66.2% of sales in the first eight months of 2026, up from just over 60% before 2012, while joint ventures' share fell to 33.8%. In August alone, mainstream joint-venture retail sales dropped 35.6% year on year.
GAC Toyota's sales peaked in 2022 at over 1 million units, but have since declined. In 2025, it sold just over 770,000 vehicles, a mere 0.3% increase. FAW Toyota has also struggled, with first-half 2026 sales of 273,700 units, down 27% from a year earlier. The combined 2025 sales of the two ventures accounted for 17.03% of all joint-venture passenger car sales, according to the China Association of Automobile Manufacturers.
Industry insiders say the old 'one brand, two JVs' model has become a source of internal competition and redundant investment. The GAC-FAW cooperation aims to resolve this by consolidating operations, including supply chain management, sales channel sharing and manufacturing division of labor. Channel sharing between the two Toyota ventures has been piloted in lower-tier cities since summer 2025.
Some analysts predict the ultimate outcome could be the merger of FAW Toyota into GAC Toyota, potentially ending the FAW Toyota brand. However, sources say the transition will be gradual. Liu Changqing, currently an assistant general manager at FAW Group, is expected to become general manager of the new entity after the restructuring, according to a person close to FAW.
