China automaker FAW to explore broader cooperation with GAC after JV stake deal

FAW Group, one of China's centrally administered state-owned automakers, said it would expand cooperation with Guangzhou Automobile Industry Group (2238) 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 percent 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 said on Tuesday.

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

• China has unveiled a roadmap through 2030 to strengthen its smart electric vehicle industry, with plans to curb overinvestment, encourage industry consolidation and eliminate inefficient capacity.

Reuters

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓