China News Service, Guangzhou, September 29 (Reporter Wang Hua) Guangzhou Automobile Group (601238.SH) announced on the evening of the 28th that it planned to purchase the equity of FAW Toyota through the issuance of shares, and resumed trading on the 29th to seal the daily limit. This cooperation between GAC and FAW is a positive practice for China's automobile industry to break geographical boundaries and amplify scale effects.
Guangzhou Automobile Group (601238.SH) plans to purchase the equity of FAW Toyota through the issuance of shares. The picture shows the office area of GAC Group headquarters. Photo courtesy of GAC Group
On the evening of the 28th, Guangzhou Automobile Group released the "Guangzhou Automobile Group Co., Ltd. Issuance of Shares to Purchase Assets and Raise Supporting Funds and Related Transaction Plan" (referred to as: "Plan"). It plans to purchase 50% of FAW Toyota's equity held by FAW Co., Ltd. through the issuance of shares, and issue shares to raise supporting funds. Guangzhou Automobile Group (601238.SH) resumed trading on the 29th, and its stock price closed at the daily limit at the opening.
According to the "Plan", the number of shares issued this time shall not exceed 30% of the total share capital of GAC Group before the issuance of supporting funds. The final number of shares issuance shall be subject to the issuance number approved by the Shanghai Stock Exchange and registered with the China Securities Regulatory Commission.
The "Plan" stated that this transaction will be conducive to giving full play to FAW's accumulation and layout advantages in various fields such as complete vehicles and industrial chains, as well as GAC's advantages in new energy and intelligent transformation, independent brand development and industrial ecological synergy, and further releasing synergistic value.
GAC Group said that currently, the global automobile industry is undergoing profound changes and the market structure is accelerating the evolution. It is difficult to cope with the multiple challenges of accelerated technological iteration, rising competition intensity and intensified cyclical fluctuations simply relying on the endogenous growth of individual enterprises. In this context, GAC and FAW integrate superior resources through strategic cooperation, which is a positive practice for China's automobile industry to break geographical boundaries and amplify scale effects. It will effectively avoid the inefficient situation of "fighting independently and duplicating construction" in various regions, and transform the scale advantage of a large country into an industrial competitive advantage.
Data from the National Bureau of Statistics show that in the first half of 2026, the automobile manufacturing industry achieved operating revenue of approximately 5.19 trillion yuan and total profits of 195.35 billion yuan. Based on this calculation, the automobile industry’s profit margin is only about 3.8%, and total profits dropped by 19.5% year-on-year; the profit margin of the entire vehicle manufacturing process has dropped to 1.5%, a new low in the past decade.
At the 2026 TEDA Auto Forum held recently, Wang Du, vice president of the China Automobile Dealers Association, said that judging from the latest industry data, the downward pressure on the auto market exceeds market expectations. Domestic passenger car sales are likely to experience double-digit negative growth this year, and the average gross profit margin of new cars is as low as -21.4%.
In the Chinese automobile market, the leading advantages of Chinese brands have further expanded. According to statistics from the Passenger Car Market Information Joint Branch of the China Automobile Dealers Association, from January to August this year, independent brands accounted for 66.2% of the market, while joint venture brands accounted for 33.8%. Among them, self-owned brands sold 1.076 million vehicles in August, down 18.9% year-on-year, but had a market share of 69.8%. Mainstream joint venture brands sold 313,000 vehicles, down 35.6% year-on-year, with a market share of only 20.3%.
Analysts in the industry pointed out that as the market share of joint venture brands continues to decline, the original "one brand, two joint ventures" model in China's automobile industry has begun to change from a tool for expansion to a source of internal friction between sister models and duplication of channel construction. This cooperation between GAC and FAW will effectively resolve the long-standing internal losses of North and South Toyota.
In addition, channel sharing between North and South Toyota has been piloted in low-tier cities starting in the summer of 2025. This cooperation will effectively promote in-depth collaboration between North and South Toyota at the operational level (such as supply chain management and control, sales channel sharing, and division of model manufacturing). It can avoid resource dispersion caused by internal competition among models on the same platform, ensure that limited resources are invested in differentiated technologies and products, and will significantly enhance the overall profitability of the GAC joint venture sector.
