754,000 units sold across the respective Toyota joint ventures of Guangzhou Automobile Group Company (GAC) and FAW Group in the first eight months of 2026, with GAC Toyota Motor Company down 24% year-on-year to 375,000 units and Tianjin-based FAW Toyota Motor Company at 379,000 vehicles on a 13% decline. Against that combined volume drop, GAC Group has signed a letter of intent to acquire part of FAW Group's 50% stake in an as-yet unnamed joint venture with a foreign automaker believed to be Japan's Toyota Motor Corporation.
| Joint venture | Units (Jan-Aug 2026, reported) | YoY |
|---|---|---|
| GAC Toyota Motor Company | 375,000 | -24% |
| FAW Toyota Motor Company | 379,000 | -13% |
| Combined | 754,000 | n/a |
The transaction, if completed, would represent a significant restructuring within China's state-owned automotive industry. GAC Group plans to issue new A shares to fund the stake purchase. FAW Group would receive those shares and become GAC Group's second-largest shareholder.
Deal structure
FAW Toyota Motor Company was established in Tianjin in 2000, with FAW Group and Toyota each holding 50% of the equity. GAC Toyota Motor Company, the Guangzhou-based partnership, was set up in 2004 on the same terms. Both joint ventures sell primarily into the domestic Chinese market, and both carry identical ownership splits that would carry through any consolidation. Toyota would retain 50% of the combined China operations following completion, per the terms outlined in the announcement.
Pressure behind the move
China's state-owned automakers face compressing volume from two directions. Fast-expanding domestic new energy vehicle manufacturers have taken market share that established joint ventures once held, while the Chinese government has been pressing large state groups to integrate overlapping resources and cut duplication.
For Toyota, two JVs selling into the same domestic market, each posting year-on-year declines, represent the kind of structural overlap the government is pressing to resolve. GAC Toyota's 24% drop is the steeper figure. FAW Toyota's 13% decline, on a slightly larger reported base of 379,000 units, shows the weakness spans both channels. The letter of intent has been signed; the acquisition remains subject to completion.