Reuters reported in late September, citing a GAC stock announcement, that the Chinese automaker would acquire 50 percent of FAW Toyota by purchasing half of the company currently owned by a subsidiary of state-owned FAW Group in the joint venture. The transaction will be financed by the issuance of new A shares. At the same time, FAW will become GAC’s second largest shareholder.
Toyota now states in its own announcement that FAW Toyota will remain independent, but that the joint venture will, in a later phase, form an alliance with the already existing joint venture GAC Toyota to “handle functions such as research and development, procurement, production and sales within the joint ventures.” This alliance aims to deepen the partnership and “further strengthen the long-term cooperative relationship between FAW, Toyota and GAC.”
Toyota, FAW and GAC recently signed a framework agreement for this strategic alliance. Based on this agreement, the companies plan to contribute assets and capital to “gradually deepen and expand their areas of cooperation through technological innovation,” according to what they say. This explicitly includes an “efficient alliance of industrial resources”, which could involve, for example, the use of plants in each other’s facilities. However, the initial focus is on accelerating the development of electric and smart vehicles.
For Toyota, this planned restructuring is also important because the Japanese automaker has until now operated in China with the aforementioned separate joint venture structures: FAW Toyota on the 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 has come under increasing pressure due to slower market growth, high excess capacity and increasing competition from Chinese electric vehicle manufacturers. The trio is now responding to this, starting with the ownership reorganization.
GAC gains importance for Toyota’s BEV business
This move elevates GAC as a direct partner of Toyota in China. Recently, GAC has gained importance for Toyota, particularly in the electric vehicle sector. According to Marklines market researchers, the co-developed bZ3X eSUV achieved around 70,000 registrations in China in 2025, accounting for about 70 percent of Toyota’s battery electric vehicle sales in the country. In total, Toyota sold around 100,000 BEVs in China last year, surpassing Volkswagen’s flagship brand, which sold around 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 in December 2025 alone than Toyota did in the entire year. With GAC’s entry into FAW Toyota, the two previously separate associations will now become closer at the shareholder level and potentially operationally in the future.
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