GAC Takes Over FAW's 50 Percent Stake in FAW Toyota as Toyota Rethinks Its China Setup

Toyota’s long-standing two-partner arrangement in China is getting a rewrite. GAC, the state-owned Guangzhou Automobile Group, is buying the 50 percent slice of FAW Toyota that FAW Group has held through a subsidiary, and all three companies have now signed off on the move. Reuters had the story out of a GAC stock exchange filing in late September, and the confirmation has followed.

GAC will pay for the stake with newly issued A-shares. That mechanism hands FAW a fresh position as GAC’s second-largest shareholder, so the transaction ends with cross-shareholding rather than a clean exit.

The nameplate on the door isn’t changing. According to Toyota, FAW Toyota keeps running as an independent company, at least for now. Things get more interesting further down the road: the joint venture is meant to form an alliance with GAC Toyota, the group’s other Chinese tie-up, covering R&D, purchasing, production and sales across both operations.

Two joint ventures, one framework

A framework agreement signed by Toyota, FAW and GAC sets the direction. The three parties intend to feed assets and capital into the arrangement and widen cooperation through what they describe as technological innovation. That includes sharing industrial resources — plant capacity at each other’s sites is explicitly on the table. The near-term priority, though, sits with faster development of electric and intelligent vehicles.

For Toyota this is a real structural shift. The Japanese carmaker has run China through two separate partnerships: FAW Toyota since 2002, and GAC Toyota since 2004. That dual-track model has been squeezed by slowing market growth, heavy overcapacity and the rise of domestic EV builders. The ownership reshuffle is the first concrete answer to that pressure.

GAC moves up in Toyota’s BEV plans

GAC’s role in Toyota’s electric business has grown quickly. The jointly developed bZ3X electric SUV logged roughly 70,000 registrations in China in 2025, about 70 percent of Toyota’s total BEV volume there, according to Marklines data. Toyota closed last year with around 100,000 battery-electric sales in the country — ahead of Volkswagen’s core brand at some 85,000.

Scale is still modest by local standards. BYD alone sold more BEVs in December 2025 than Toyota managed across the whole year. Bringing GAC into FAW Toyota’s shareholder structure pulls the two partnerships closer together on paper — and possibly in day-to-day operations later on.