Toyota Motor Corporation confirmed that Chinese state-owned automaker FAW Corporation Limited (FAW) and Guangzhou Automobile Group Company Ltd (GAC) have signed a new strategic cooperation agreement this week to “gradually deepen and expand their areas of cooperation,” after the two companies held discussions last month.
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FAW has agreed to GAC’s proposal to transfer its 50% shareholding in the FAW Toyota Motor Company Ltd to GAC. In return, GAC will issue new shares, allowing FAW to become the group’s second-largest shareholder.
GAC already owns a 50% stake in another major joint venture with Toyota, called GAC Toyota Motor Company, meaning that GAC will become the main Chinese partner in both of Toyota’s main Chinese joint ventures.
Traditionally the two joint ventures, both established in the early 2000s, covered different areas of China in terms of dealer networks. Together, they sold around 750,000 vehicles in China in the first eight months of 2026. Since they were established, the two joint ventures have sold 23 million vehicles to Chinese customers combined.
Toyota confirmed in a statement: “Based on the new strategic cooperation framework agreement signed by FAW and GAC, the two companies will build on an asset and capital alliance to gradually deepen and expand their areas of cooperation through technological innovation. The two companies will also aim to achieve an efficient alliance of industrial resources across regions to strengthen their business foundations and enhance corporate value.
Against this backdrop, FAW, Toyota, and GAC have resolved to establish a new framework for a three-company strategic alliance to promote the sustainable and sound development of the joint ventures.”
Toyota said that both joint ventures will continue to operate as independent companies, with Toyota also retaining its 50% stake in each company. But the new structure will simplify dealings between the two joint ventures at operational level, allowing for better collaboration in terms of product, R&D, technology transfer and business strategy.
Toyota confirmed that “FAW Toyota and GAC Toyota will establish an alliance to handle functions such as research and development (R&D), procurement, production, and sales within the joint ventures. This alliance represents a significant step toward further deepening the cooperative relationship between FAW and GAC, and it will further strengthen the long-term cooperative relationship among FAW, Toyota, and GAC.”
Under the new alliance framework, FAW, Toyota, and GAC plan to use their respective strengths to support improvements in competitiveness through collaboration between FAW Toyota and GAC Toyota and accelerate the development of electrification and intelligence at both joint ventures. “All the companies will strive to be the ‘best in town’ and provide even more competitive products and high-quality services to bring smiles to the faces of customers.”
