China's FAW Group is preparing to acquire a stake in GAC Group. Amid these reports, GAC suspended trading of its shares on the morning of September 14. According to CarNewsChina, the initiative comes from regulatory authorities, and FAW's stake may be obtained through asset transfer. The specific structure of the deal has not yet been disclosed.
The reason for the potential merger is the pressure on traditional manufacturers. In the first half of 2026, domestic car sales in China decreased by 20% year-on-year. GAC sold 1.72 million vehicles in 2025, 14.06% less than the previous year, and the group's net loss amounted to 8.78 billion yuan.
FAW also has to accelerate its technological restructuring. In 2025, the group produced 3.31 million vehicles compared to 3.73 million in 2020, and the share of new energy vehicles was only 13.5% of production. At the same time, FAW has already invested in Leapmotor, strengthening its presence in the fast-growing segment.
For the two companies, the merger could mean sharing factories, developments, and supply chains. Commercial vehicles are particularly interesting: FAW has strong positions with Jiefang, which potentially complements GAC's structure.
China is already consolidating large state-owned auto groups: in 2025, Changan was transformed into a central state-owned company, becoming the third major automotive association of this level, along with FAW and Dongfeng.