FAW to expand cooperation with GAC under strategic framework after stake deal
FAW said it will broaden cooperation with Guangzhou Automobile Industry Group to improve operational quality and efficiency, citing a strategic framework signed on Tuesday and linking it to GAC’s plan to acquire a 50% stake in FAW Toyota that will make FAW its second-largest shareholder.
Sept 29 (Reuters) — FAW Group, one of China's centrally administered state-owned automakers, said it will expand cooperation with Guangzhou Automobile Industry Group to improve operational quality and efficiency as consolidation gathers pace in the world's largest auto market. Under a strategic cooperation 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 automakers, FAW said in a statement.
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. The China Association of Automobile Manufacturers said on Tuesday that FAW and Guangzhou Automobile Industry Group should pursue joint technology development and resource sharing to boost competitiveness and supply-chain resilience. CAAM said cross-regional integration still faces hurdles, including capacity quota transfers, tax-sharing arrangements and lengthy approvals, and called for policy support to facilitate industry consolidation.
China has set out a roadmap through 2030 to bolster its smart electric vehicle industry, aiming to restrain overinvestment, promote consolidation and phase out inefficient capacity.