Summary of Key Points
In the first half of 2026, FAW Toyota's sales plummeted by 27% year-on-year, with only 273,700 units sold. Not only did it fall out of the top three positions among joint-venture brands in terms of sales, but it was also overtaken by GAC Toyota. Last year, FAW Toyota led GAC Toyota by 50,000 units; however, this year GAC Toyota sold 70,000 more units than FAW Toyota. The reasons for this turnaround are as follows: its traditional fuel vehicle portfolio has been largely replaced by domestic new energy vehicles, while its electric vehicle offerings have not kept up with the market demand. GAC Toyota, on the other hand, was able to make up for the sales shortfall thanks to its locally developed electric vehicles (the Boltz series) and the support of its parent company, GAC Group, which has strong new energy capabilities.
I. A Dramatic Reversal for FAW and GAC Toyota in the First Half of the Year: From Leaders to Laggards
Last year, FAW Toyota sold 805,500 units, 50,000 more than GAC Toyota, and had ranked among the top three joint-venture brands for two consecutive years. In the first half of this year, however, GAC Toyota sold 341,100 units, while FAW Toyota only managed 273,700 units, resulting in a gap of 70,000 units. This reversal is not accidental. FAW Toyota's sales rely heavily on fuel vehicles (262,300 units sold in the first half, accounting for 96% of total sales), but its older models (such as the Rongfang, Corolla Reifang, and Asia Dragon) have seen significant declines in sales. This decline is largely responsible for the gap. Meanwhile, GAC Toyota has managed to stabilize sales with its fuel vehicles (such as the Camry and Senna) while also benefiting from its electric vehicle offerings.
II. Fuel Vehicles Are No Longer Selling Well: Older Models Can't Compete with Domestic New Energy Vehicles
Why are FAW Toyota's fuel vehicle sales declining so sharply?
- External Factors: The fluctuating oil prices and adjustments in subsidies in the first half of the year contributed to a 39% year-on-year decline in the retail sales of fuel vehicles.
- Internal Issues: FAW Toyota's main fuel vehicles are priced in the mid-to-high range (100,000 to 200,000 yuan), which is exactly where domestic new energy vehicles are competing fiercely. Domestic new energy vehicles now offer large interiors, advanced infotainment systems, and assisted driving features at these prices. For example, models like the BYD Song and Geely Galaxy L7 have higher specifications than FAW Toyota's models, making it difficult for FAW Toyota to compete with price discounts alone.
- Electric Vehicles: GAC Toyota's electric vehicles (the Boltz series) have performed well because they are tailored to Chinese consumer preferences, using local supply chains and technologies such as Momenta's assisted driving systems, Hesai's lidar, and iFlytek's AI. In contrast, FAW Toyota's bZ series remains more of a "global" model, with the earlier bZ4X having been discontinued, and the current bZ3 and bZ5 facing sales challenges.
III. Electric Vehicles Are Holding Back FAW Toyota: GAC Adapts to Local Market Conditions, While FAW Struggles
The difference between the two companies lies in their electric vehicle strategies:
- GAC Toyota: The Boltz series (3X and 7) sold 51,900 units in the first half of the year, nearly five times as many as FAW Toyota's bZ series (11,500 units). The success of the Boltz series is due to its localization efforts, using Chinese components and technologies like Momenta's assisted driving system, Hesai's lidar, and iFlytek's AI.
- FAW Toyota: Its bZ series still follows a "global" design philosophy. For example, the bZ4X was discontinued, and the sales of the bZ3 and bZ5 are struggling, with some 4S stores even reporting a lack of inventory (customers having to wait until August for updates or look at GAC Toyota's offerings).
IV. Different Levels of Support from Shareholders: GAC Has Aion, While FAW Lacks a Comprehensive New Energy Ecosystem
The significant difference in their electric vehicle performance is due to the support provided by their respective shareholders:
- GAC Toyota: Its parent company, GAC Group, owns Aion, a leading domestic new energy brand with a complete new energy platform, supply chain, and marketing expertise. The Boltz series was jointly developed by GAC and Toyota, leveraging Aion's technology for lower costs and higher specifications.
- FAW Toyota: FAW Group has not yet fully transitioned to new energy technologies. Although it has collaborated with companies like BYD (for the bZ3 battery) and Momenta, it lacks a comprehensive new energy ecosystem. External suppliers can only provide individual technologies but cannot help with platform development, cost control, or sales channels.
V. Weak Retail Presence: Fewer Electric Vehicles at Dealerships
The difference between the two companies is evident in their dealership layouts:
- FAW Toyota: Dealership displays still feature fuel vehicles, with only one electric vehicle (the bZ3) and no bZ5 available for customers to see.
- GAC Toyota: Displays prominently showcase the Boltz series, with both fuel and electric models available. GAC Toyota also has a larger network of dealerships (877 vs. 772), providing better coverage.
FAW Toyota's current challenges are that its fuel vehicle sales are declining, and its electric vehicle offerings are not keeping up with market demand. If it does not accelerate its electrification efforts, its position in the market will only become more difficult to maintain.
Conclusion
FAW Toyota's dilemma stems from the failure of its traditional business model to adapt to the new era of consumer preferences. While the fuel vehicle era relied on classic models and discounts, the new energy era demands intelligent and locally tailored products. FAW Toyota is still stuck with a global approach and lacks the necessary support from its shareholders to compete effectively. To turn things around, it needs to localize its electric vehicles more thoroughly and make full use of its parent company's new energy resources. Otherwise, it may never regain its place among the top joint-venture brands.