China’s FAW to explore broader co-operation with GAC after JV stake deal - TimesLIVE

FAW Group, one of China’s centrally administered state-owned carmakers, says it will expand co-operation with Guangzhou Automobile Industry Group to improve operational quality and efficiency as consolidation gathers pace in the world’s largest car market.

Under a strategic co-operation framework agreement signed on Tuesday, FAW and GAC’s controlling shareholder Guangzhou Automobile Industry Group will seek a new model of strategic collaboration between central and local state-owned carmakers, FAW said.

The framework partnership follows GAC’s announcement on Monday that FAW is set to become its second-largest shareholder through GAC’s acquisition of a 50% stake in FAW Toyota.

FAW and Guangzhou Automobile Industry Group should pursue joint technology development and resource sharing to boost competitiveness and supply chain resilience, the China Association of Automobile Manufacturers (Caam) said on Tuesday.

Cross-regional integration faces hurdles including capacity quota transfers, tax sharing arrangements and lengthy approvals, Caam said, calling for policy support to facilitate industry consolidation.