On October 5th, FAW Toyota released a statement refuting rumors suggesting that the company would be acquired and subsequently removed from the automotive landscape.

FAW Toyota clarified that the recent strategic cooperation framework agreement signed between China FAW Group Co., Ltd. and Guangzhou Automobile Industry Group Co., Ltd. has garnered significant attention from both the industry and consumers. With a 23-year history deeply rooted in the domestic market, FAW Toyota boasts a mature product lineup, a comprehensive production, sales, and after-sales network, and a vast user base. Currently, all production, sales, and model iteration plans are proceeding as planned. Looking ahead, FAW Toyota will continue to innovate and leverage the enhanced resource advantages resulting from the group's cooperation to reciprocate the trust of its users.

FAW Toyota also underscored its intention to take legal action against the dissemination of false statements by certain online accounts, including claims that 'FAW Toyota may completely disappear from the historical stage' and 'Toyota is implementing drastic price cuts.'

The integration of FAW Toyota and GAC Toyota marks a significant milestone in FAW's equity investment in GAC. On the evening of September 14th this year, GAC announced the signing of an 'Intent Agreement' with FAW Group Co., Ltd., the core operational platform of FAW Group. According to GAC's announcement, it plans to acquire a portion of the equity in a joint venture automotive company held by FAW Group Co., Ltd. through share issuance and raise matching funds (supporting funds). Preliminary calculations indicate that upon completion of this transaction, FAW Group Co., Ltd. will emerge as GAC's second-largest and strategically influential shareholder.

On September 28th, GAC Group issued a series of 16 announcements, providing detailed insights into its strategic cooperation with FAW. According to these announcements, GAC Group intends to purchase a 50% stake in FAW Toyota held by FAW Group Co., Ltd. through share issuance and raise matching funds (supporting funds). Regarding the fundraising, the counterparty for the share issuance in this transaction is FAW Group Co., Ltd., with a provisional issue price set at 5.75 yuan per share. The exact number of shares to be issued remains undetermined.

Furthermore, GAC Group stated that it will engage in strategic collaboration with FAW based on their respective resource endowments and advantages, fostering resource sharing, complementary strengths, and deepening cooperation in areas such as technology, supply chains, and markets. Following the implementation of this plan, two major transformations are anticipated: First, FAW Group Co., Ltd. will become GAC's second-largest and strategically influential shareholder. Second, GAC will concurrently own two joint venture companies, GAC Toyota and FAW Toyota, with 'North and South Toyota' expected to achieve collaborative operations in product planning, parts procurement, and marketing resources.

According to publicly available information, North and South Toyota commenced experiments with channel sharing in select lower-tier cities in China during the summer of 2025. Citibank estimates that the integration of North and South Toyota could create a unified platform with an annual production capacity of approximately 1.2 to 1.3 million vehicles. Through model rationalization, joint procurement, and dealership network integration, it is projected to achieve cost savings of approximately 2 to 3 percentage points in sales costs and 1 to 2 percentage points in sales and administrative expenses, respectively.

However, this move has also sparked external discussions. Realistically, GAC now holds equal equity stakes in two Toyota joint venture companies. Previous analyses had suggested that North and South Toyota might be merged into a single entity. However, judging from FAW Toyota's current response, the integration and collaboration between North and South Toyota will primarily focus on areas such as production, research and development, and channels, without involving brand integration. In essence, the two companies will maintain their independence.