Officially confirmed: GAC acquires a 50 percent stake in FAW Toyota
The Guangzhou Automobile Group (GAC) will acquire the 50% stake in FAW Toyota held by FAW. The deal, which leaked out over two weeks ago, has now been confirmed by all parties involved. Importantly, FAW Toyota is expected to continue operating as an independent company—at least for now.
Image: FAW Toyota
Reuters reported at the end of September, citing a GAC stock exchange announcement, that the Chinese automaker would acquire 50 percent of FAW Toyota by purchasing the share held by a subsidiary of the state-owned FAW group in the joint venture. The transaction is set to be funded through the issuance of new A-shares. Meanwhile, FAW is expected to become GAC’s second-largest shareholder.
Toyota states in a separate announcement that FAW Toyota will remain independent afterward, but that the joint venture should form an alliance at a later stage with the already existing GAC Toyota to “integrate functions such as research and development, procurement, production, and sales within the joint ventures.” This alliance is intended to deepen the partnership and “strengthen the long-term cooperation between FAW, Toyota, and GAC.”
Toyota, FAW, and GAC have recently signed a framework agreement for such a strategic alliance. Under this contract, the companies aim to contribute assets and capital “to gradually deepen their cooperation through technological innovation,” according to the agreement. This explicitly includes “a cross-regional pooling of industrial resources,” meaning things like sharing manufacturing facilities with each other’s partners are possible. However, the immediate focus is on accelerating the development of electric and intelligent vehicles.
For Toyota, the planned shift is significant because the Japanese automaker has so far operated in China using the aforementioned separate joint-venture structures: FAW Toyota on one hand and GAC Toyota on the other. The partnership with FAW dates back to 2002, while the joint venture with GAC was established in 2004. However, this dual structure is under increasing pressure due to slower market growth, high overcapacity, and growing competition from Chinese electric vehicle manufacturers. The trio is now responding to this by starting with reorganizing the ownership structure.
GAC Gains Importance for Toyota’s BEV Business
GAC is thereby elevated as Toyota’s direct partner in China. GAC has gained increasing importance for Toyota, especially in the field of electric vehicles. The jointly developed electric SUV, the BZ3X, is expected to see around 70,000 registrations in China by 2025, according to market researchers at Marklines, accounting for about 70 percent of Toyota’s battery-electric vehicle sales in that country. Overall, Toyota sold around 100,000 BEVs in China last year, surpassing Volkswagen for the first time, which sold approximately 85,000 vehicles.
Despite this progress, Toyota remains a relatively small player in China’s electric vehicle market. For comparison, BYD sold more battery-electric vehicles alone in December 2025 than Toyota did throughout the entire year.
With GAC's entry into FAW Toyota, the two previously separate partnerships at the shareholder level will now become closer — and potentially also operationally.