GAC Proposes Equity Absorption of China FAW's Half Share in Toyota Venture

GAC Group has disclosed a preliminary restructuring plan to purchase the entire 50% equity interest held by China FAW Group in FAW Toyota Motor. The transaction will be funded through newly issued A-shares priced at 5.75 yuan ($0.85) each, positioning China FAW as GAC's second-largest shareholder upon completion while maintaining ultimate governance under Guangzhou's municipal state asset authority.

Following a trading halt on September 14, GAC shares resumed trading on September 29 as parent firm Guangzhou Automobile Industry Group signed a strategic cooperation pact with China FAW. Bringing FAW Toyota and GAC Toyota under single-group coordination seeks to eliminate duplicative development, streamline shared supplier networks, and reconcile parallel vehicle lines such as the Wildlander and RAV4.

The transaction follows steep delivery declines for traditional internal-combustion lines in China. Between January and August 2026, FAW Toyota deliveries fell 26.6% year-over-year to 378,872 vehicles, while GAC Toyota volumes dropped 10% to 446,591 units. FAW Toyota reported 108.62 billion yuan in 2025 revenue with net profit falling to 4.23 billion yuan, followed by first-half 2026 net earnings of 1.01 billion yuan on revenue of 40.73 billion yuan.

In parallel with the asset acquisition, GAC intends to place shares with up to 35 qualified investors to secure working capital and finance FAW Toyota facility investments. The restructuring remains subject to formal asset valuation, board and shareholder approvals, and clearance from the Shanghai Stock Exchange and China Securities Regulatory Commission.