Business

China may have found a way to tackle car glut

By Sohail Khan 17 September 2026, 12:41 am

Benchmarks
Nifty23,217.6099.0

FEATURED FUNDS★★★★★

Motilal Oswal Midcap Fund Direct-Growth

5Y Return
22 %

Invest Now

Enter search text:

Business News›News›International›Business›China may have found a way to tackle glut in car market

Read Today's Paper

China may have found a way to tackle glut in car market
Synopsis

Two state-owned cos, which make Toyota models, plan to combine ops in a sign that car sector is headed for consolidation.

China May Have Found a Way to Tackle Glut in Car Mkt — China car market

China has long called for consolidation to rein in production overcapacity in the world's biggest auto market, only for those efforts to fizzle. But a deal involving two state-owned companies is a sign that it may finally have found a way of tackling the problem of making too many cars.

Guangzhou Automobile Group announced plans to buy a stake from FAW Group in an unspecified car-manufacturing venture by issuing GAC shares to FAW in return. Since both companies make Toyota models in China, analysts said the move likely indicates the two government-owned firms are planning to combine those operations.

Rather than trying to force a shotgun marriage between competing carmakers backed by rival local governments-a strategy that's failed before-China appears to be targeting foreign-brand joint ventures for consolidation, which makes any production cuts more palatable to domestic stakeholders. This way, both enterprises remain independent while trimming capacity.

But domestic sales were fewer than half that amount last year, according to the China Passenger Car Association, resulting in too many cars chasing too few buyers. Some of that excess is finding its way into overseas markets, with the China Association of Automobile Manufacturers data showing exports jumped 21% to more than 7 million cars. That's exacerbating trade tensions.

The surplus production of cars is also taking a toll on industry profitability at home, as Chinese carmakers seek to undercut one another by slashing prices.

Add as a Reliable and Trusted News Source
Add Now!

(You can now subscribe to our WhatsApp channel)

(You can now subscribe to our WhatsApp channel)

Read More News on
China auto marketGAC FAW partnershipcar production in Chinachina car marketchina car exports

Enter search text:

Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories

& personalised newsletters
Login Now

Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &

in-depth stock reports
Subscribe Now

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Subscribe to gain powerful insights on business, stock market and industry trends.

Big Price Drop! Flat 40% Off

Student Only Offer

Already a Member? Sign In now

Already a Member? Sign In now
Already a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail Offer
Avail Offer

Claim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004

' + h3 + '

' + h4 + '

' + listing + '

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with in-depth insights that matter

Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

The problem with lab grown diamonds
Why a falling rupee is a better option for the economy

A list of top 20 momentum stocks that have delivered massive returns in one year