Toyota said it signed a strategic alliance framework with China FAW and Guangzhou Automobile Group to speed electrification and intelligent-vehicle work. GAC is to take FAW's stake in FAW Toyota.
Toyota Motor said on Thursday it had signed a framework agreement with state-owned China FAW and Guangzhou Automobile Group to accelerate electrification and intelligent-vehicle development, Kyodo News reported from Nagoya. The companies called the document a strategic alliance framework.
Toyota already builds cars in China through FAW Toyota and GAC Toyota. Kyodo reported that Toyota's China sales have been sluggish as local electric-vehicle makers intensify competition.
Under the plan described by the three companies, GAC will acquire FAW's 50 percent stake in FAW Toyota through a share issue, making FAW a strategic shareholder in GAC. In a later phase, FAW Toyota and GAC Toyota are to form an alliance covering research, procurement, production and sales inside the joint ventures.
The companies said they would use their respective strengths to improve competitiveness through collaboration between the joint ventures. They called the step a deepening of the long-term relationship among Toyota, FAW and GAC.
Kyodo did not report a transaction value or a closing date. The announcement is a framework, not a completed merger of the joint ventures.
People Sentiments Neutral
- Toyota, FAW and GAC said the framework would support competitiveness through collaboration between their joint ventures.