On September 28, 2026, GAC GROUP (SEHK: 02238) released its "Preliminary Plan for Purchasing Assets Through Share Issuance and Raising Matching Funds via Related-Party Transactions," formally disclosing significant progress in its strategic partnership with FAW Group. The announcement stated that GAC GROUP intends to acquire a 50% equity stake in FAW Toyota held by FAW Group through share issuance, as well as raise matching funds through the issuance of additional shares. This marks substantive progress in the widely watched strategic collaboration between a leading central state-owned automaker and a municipal-level automaker, injecting strong momentum into building a new central-local synergy framework for the auto industry and pioneering a new model of high-quality development.

Announcement Confirms: GAC and FAW Strategic Partnership Achieves Important Progress

After a multi-day trading suspension, the framework of the strategic partnership between GAC and FAW has been officially unveiled. According to the announcement, the two parties will engage in strategic collaboration based on their respective resource endowments and strengths, further advancing resource sharing and complementary advantages, and deepening coordination in areas such as technology, supply chains, and markets. As a large domestic automotive industry group, GAC GROUP (SEHK: 02238) has continued to build its position in new energy and intelligent transformation, independent brand development, and industrial ecosystem construction, with business covering research and development, complete vehicles, components, commerce and mobility, energy ecosystems, internationalization, and investment and finance, making it one of the most comprehensive automotive groups in China with the most complete industrial chain and layout. FAW, meanwhile, is a key central state-owned enterprise in China's automotive industry, with deep accumulation in complete vehicle R&D and manufacturing, industrial chain layout, and brand operations. By transcending the logic of single-company competition and engaging in strategic cooperation, both parties can fully leverage GAC's strengths in new energy and intelligent transformation, independent brand development, and industrial ecosystem synergy, as well as FAW's accumulated advantages across complete vehicles, industrial chains, and other areas, fully unleashing collaborative value.

North-South Toyota Collaborative Operations to Stabilize Profitability Foundation of Joint Venture Business

The strategic partnership between GAC and FAW has consistently adhered to the basic principles of market orientation, legal compliance, open cooperation, and mutual benefit. Among these, the optimized allocation of resources between North and South Toyota represents an important exploration by both parties, together with their globally important partner Toyota Motor, to jointly drive joint venture operations toward high-quality development and enhance market competitiveness. FAW Toyota was established as a joint venture between FAW Group and Toyota Motor, with complete vehicle bases in Tianjin, Changchun, and Chengdu plus supporting engine plants, possessing self-developed and self-manufactured capabilities for complete vehicles and core components. Once this plan is implemented, GAC GROUP (SEHK: 02238) will simultaneously hold stakes in both GAC Toyota and FAW Toyota, and "North-South Toyota" is expected to achieve coordinated planning in product planning, component procurement, and marketing resources. Previously, FAW Toyota and GAC Toyota operated independently in deep cultivation of their respective markets, running parallel tracks in product layout, supply chain support, terminal channels, and marketing systems. The dual-track operating model could fully release production capacity and capture market dividends during the industry's high-speed expansion phase, but in the new stage of stock competition and rapid electrification and intelligent iteration, problems such as resource dispersion and duplicated investment have gradually become prominent, constraining efficiency upgrades and profit release in the joint venture segment. This transaction will directly promote collaborative operations between North and South Toyota and stabilize the profitability foundation of the joint venture business. By coordinating and integrating both parties' localized R&D, supply chain systems, production bases, and market expansion resources, it will amplify economies of scale, reduce duplicated investment, share technological innovation costs, and concentrate efforts on tackling key core technologies, further enhancing GAC's overall competitiveness, helping the company seize opportunities in the restructuring of the automotive industrial chain, and accelerating the building of a globally competitive leading automotive group. According to data from the China Association of Automobile Manufacturers, in 2025, the combined sales of North and South Toyota accounted for 17.03% of joint venture passenger vehicle sales, ranking among the top joint venture brands by market share. The implementation of collaborative operations between the North and South joint ventures will help enhance GAC GROUP's market position in the joint venture segment and provide strong support for the company's long-term stable development.

Innovative Cooperation Path Creates First Central-Local Automaker Synergy Model

Recently, the Ministry of Industry and Information Technology and eight other departments issued the "15th Five-Year Plan for the Development of Intelligent Connected New Energy Vehicle Industry," which explicitly requires strict control of new production capacity and encourages mergers and acquisitions. The strategic partnership between FAW and GAC is a positive practice that promotes the optimization of industrial resources between local state-owned enterprises and central state-owned enterprises and enhances operational efficiency. Unlike the traditional heavy-asset integration model of full mergers and system restructuring between automakers, the strategic partnership between FAW and GAC innovatively adopts a new cooperation path, using capital as a link to break down barriers and prioritizing synergy in core businesses, creating an innovative paradigm for strategic coordination between central and local state-owned enterprises. This new strategic synergy model balances industrial stability, preservation and appreciation of state-owned assets, healthy industry development, and the interests of multiple stakeholders, and is undoubtedly the optimal development path suited to the current industry policy environment and market landscape. The strategic partnership between the two parties will provide a reference path for other state-owned automakers seeking cross-regional, cross-level coordination, push the industry away from low-level homogeneous competition, help enhance the overall competitiveness of China's automotive industry, and accumulate strong momentum for the high-quality development of China's automotive sector.