China FAW, Toyota Motor and GAC Group sign strategic cooperation agreement

China News Service, Guangzhou, October 8 (Reporter Wang Hua) China FAW Corporation, Toyota Motor Corporation, and Guangzhou Automobile Group Co., Ltd. signed a new strategic cooperation framework agreement in Guangzhou on October 8. According to the agreement, GAC Group plans to purchase 50% of the equity of FAW Toyota held by China FAW through the issuance of shares. After the transaction is completed, China FAW will become an important strategic shareholder of GAC Group. GAC Group will become the common Chinese shareholder of the two joint ventures "North and South Toyota" and coordinate the research and development, procurement, production, sales and other related work of the two joint ventures.

In 2002, China FAW and Toyota Motor reached a comprehensive strategic cooperation agreement, and in 2004, Guangzhou Automobile Group and Toyota Motor established a joint venture. Over the years, two joint ventures, FAW Toyota Motor Co., Ltd. and GAC Toyota Motor Co., Ltd., have each deeply explored the market and operated independently, forming a "North-South Toyota" pattern. As of now, the two joint ventures have accumulated more than 23.56 million users in the Chinese market.

On October 8, China FAW, Toyota Motor and Guangzhou Automobile Group signed a new strategic cooperation framework agreement in Guangzhou. The picture shows the signing ceremony scene. (Photo courtesy of GAC Group)

With the implementation of this strategic cooperation, "North-South Toyota" will move to a new stage of "full-link coordination and coordination" and promote integrated operations across the entire chain of R&D, procurement, production, and sales. By coordinating local R&D, supply chain systems, production bases, and market expansion, we can fully amplify large-scale synergy, effectively reduce duplication of construction and investment, and share the cost of technological innovation.

According to data from the China Association of Automobile Manufacturers, the combined sales volume of "North and South Toyota" will account for 17.03% of joint venture passenger car sales in 2025, ranking among the top joint venture brands in terms of market share.

The three parties reached a consensus this time that in the future, China FAW, Toyota Motor, and GAC Group will rely on their respective profound industrial accumulation and core advantages to form development synergies with equity as a link, and build a new joint venture and cooperation model with deep linkage. The powerful alliance of the three parties will promote "North and South Toyota" from decentralized operations to integrated development, effectively release economies of scale, and provide a practical example for China's joint venture automobile industry to improve quality and efficiency.