Source | YuanAuto

“The company plans to purchase a portion of the equity in a vehicle joint venture company held by FAW Co., Ltd., through share issuance and raising matching funds.”

The reason behind GAC Group's securities trading halt on September 14 has finally been unveiled. Contrary to widespread media speculation about a merger and reorganization between GAC and FAW, the focus lies on a 'vehicle joint venture company' under FAW Co., Ltd. According to the Tianyancha APP, FAW Co., Ltd. controls two vehicle joint venture companies: FAW-Volkswagen Automotive Co., Ltd. and FAW Toyota Motor Co., Ltd.

As per the announcement, once the transaction is finalized, FAW Co., Ltd. will emerge as the second-largest and strategically influential shareholder of GAC Group. In simpler terms, GAC Group will acquire equity in a vehicle joint venture company under FAW through share issuance, and these additional shares will position FAW as the second-largest shareholder of GAC.

“This transaction will not result in a change in the company's actual controller, nor will it constitute a restructuring listing. As of the announcement's disclosure date, the transaction is still in the planning phase and is subject to uncertainties,” GAC Group stated in the announcement.

Regarding this transaction, Caijing magazine reported on September 15 that sources revealed to them that the 'vehicle joint venture company under FAW' mentioned in the announcement refers to FAW Toyota Motor Co., Ltd. Following the transaction's completion, FAW Toyota will continue to exist as a legal entity, with its shareholders changing to FAW Co., Ltd., GAC Group, and Toyota-affiliated entities. Toyota Motor will become the largest shareholder of FAW Toyota.

“The transaction will not lead to a merger between GAC Toyota and FAW Toyota,” Caijing magazine quoted sources as saying.

Although Caijing magazine also noted that the aforementioned information had not been confirmed by relevant parties, including Toyota China, considering the respective business situations of GAC Group and FAW Co., Ltd., FAW Toyota is indeed a more plausible candidate for the 'vehicle joint venture company' than FAW-Volkswagen. From the perspective of the market positions of the 'Northern and Southern Toyotas,' the necessity for a merger is far less than that for cooperation.

After all, GAC Group has already set a precedent by propelling Toyota’s electric vehicles to long-term success.

According to third-party retail sales data submitted by dealers to automakers, GAC Toyota's bZ4X sold 9,216 new vehicles in August this year, nearing the 10,000-unit monthly sales mark for the third time since its launch in March 2025. In October and November 2025, as well as April 2026, this Toyota pure electric SUV achieved monthly sales exceeding 10,000 units.

In comparison, another joint venture new energy vehicle that successfully achieved monthly sales exceeding 10,000 units in 2025—the Dongfeng Nissan N7—showed signs of fatigue after its initial breakthrough, with its highest monthly sales since entering 2026 being 1,635 units.

Using the words of William Li, founder, chairman, and CEO of NIO, GAC Toyota's bZ4X is a true success that has successfully navigated the 'valley of death' for new vehicles.

“In the past, a successful fuel vehicle could be sold continuously for 5 to 7 years, with a long investment amortization period. Now, with the rapid iteration of chips and batteries, the entire vehicle must follow suit, or it will become outdated. Few new vehicles can remain hot sellers for a year now—it's too challenging.”

Li stated at the High-Level Forum on Intelligent Electric Vehicle Development in April this year that new vehicles generate the most heat and concentrated orders at launch, but it takes time to ramp up production capacity. By the time production and supply chains catch up, demand has already declined. “It's normal for a model to waste several hundred million yuan, with neither the manufacturer nor the supply chain earning a profit.”

Returning to GAC Toyota's bZ4X, in the 10th month after its first monthly sales exceeded 10,000 units, the vehicle is expected to cross the success threshold for the third time—a rarity in today's new energy vehicle race and even more so among joint venture brands.

Of course, GAC Toyota doesn't always succeed. For example, the second model, the bZ7, which extensively incorporates GAC Group's electrification technology and supply chain resources, offers configuration and pricing sincerity (which means 'sincerity' or 'good faith' in terms of value for money) comparable to or even better than the bZ4X. However, since its launch in March this year, its highest monthly sales have been 4,637 units, with an average monthly sales volume of less than 3,000 units.

But even with a success rate reduced to 50%, GAC Toyota remains a role model for electrification transformation among joint venture automakers, especially for FAW Toyota.

Over the past year (September 2025-August 2026), FAW Toyota has sold a cumulative total of 33,724 new energy vehicles, approximately 30% of GAC Toyota's sales during the same period. Both brands bear Toyota's 'bull emblem' and have similar terminal starting prices slightly above 100,000 yuan, yet their sales volumes differ by two to three times. The disparity between FAW Toyota and GAC Toyota can only be explained by product competitiveness.

Taking FAW Toyota's best-selling pure electric vehicle, the bZ3, and GAC Toyota's bZ4X as examples, both vehicles have an official guide price of 109,800 yuan. However, the latter comes standard with automatic parking in its base model and includes lidar and urban navigation assistance functions as standard from its second-highest trim level. In contrast, the Toyota bZ3 lacks driving assistance features such as automatic parking and navigation assistance across all trims except the top-tier model.

GAC Toyota's bZ4X can offer more intelligent configurations that cater to consumer preferences at a similar price point, clearly indicating superior cost control capabilities compared to the FAW Toyota bZ3. From a fundamental perspective, the research and development of GAC Toyota's bZ4X can largely be closed-loop within GAC Group's 'arsenal,' while the FAW Toyota bZ3 involves BYD.

According to public information, the FAW Toyota bZ3 was primarily developed by BYD Toyota Electric Vehicle Technology Co., Ltd., with its 'three electric' (battery, motor, electric control) hardware bearing a strong BYD influence. A model involving an additional stakeholder naturally requires more consideration in profit distribution.

As for why FAW Toyota cannot 'borrow' technology and resources from its Chinese joint venture partner like GAC Toyota does, that question would have to be directed at FAW. It is believed that unless pushed to the point of no alternative, FAW would not agree to let others interfere in FAW Toyota—after all, despite its challenges, this joint venture has maintained slight year-on-year sales growth for three consecutive years as of 2025 and continues to contribute profits to FAW.

Nevertheless, by bringing in GAC as a savior for Toyota’s electric vehicles without spending a dime in cash and 'incidentally' becoming GAC's second-largest shareholder, FAW has indeed made a shrewd deal.

Some images are sourced from the internet. Please notify us for removal if there is any infringement.