Toyota said it signed a framework with China FAW and Guangzhou Automobile Group to speed electrification, including a stake shift that makes FAW a shareholder in GAC.
Toyota Motor said on Thursday it signed a framework agreement with state-owned China FAW and Guangzhou Automobile Group to accelerate electrification and intelligent-vehicle development, Kyodo reported from Nagoya. The companies already work together through FAW Toyota and GAC Toyota.
Toyota's sales in China have been sluggish as local electric-vehicle makers intensify competition, Kyodo said. The three companies said FAW, Toyota and GAC will use their strengths to support competitiveness through collaboration between the joint ventures.
Under the plan, GAC will acquire FAW's 50 percent stake in FAW Toyota through a stock issuance, making FAW a strategic shareholder in GAC. In a later phase, FAW Toyota and GAC Toyota will form an alliance covering research and development, procurement, production and sales inside the joint ventures.
The companies called the alliance a significant step in deepening cooperation between FAW and GAC and in strengthening the long-term relationship with Toyota. No transaction value or closing date was included in the Kyodo account.
The announcement is a framework, not a completed merger of the joint ventures. The stake transfer still has to be carried out.