Guangzhou-based automaker GAC announced its intention to acquire a 50 percent equity stake in the FAW Toyota joint venture. This move will see GAC replace the China FAW Group Corporation as the partner in the venture, aiming to streamline operations within the Chinese market. GAC already operates the GAC Toyota joint venture, and the new structure seeks to better coordinate research, development, supply chains, and marketing.
Market data indicates a decline in sales for both existing joint ventures. From January to August 2026, GAC Toyota delivered 446 591 vehicles, marking a 10 percent year-over-year decrease. During the same period, FAW Toyota delivered 378 872 units, reflecting a 26.6 percent drop. These figures are attributed to the shrinking market share of internal combustion engine vehicles in China, prompting a strategic shift by Toyota.
Despite the change in the joint venture structure, FAW is set to become the second-largest shareholder of GAC. This consolidation aligns with broader industry trends in China, where officials have noted that market competition and shifting demand make such mergers inevitable. Furthermore, Toyota plans to expand its presence in the new energy vehicle segment by producing approximately 200 000 extended-range electric vehicles in China by 2027.
