Toyota’s joint venture, FAW Toyota, issued a statement denying reports that it’s “slashing prices” in China and may exit the market entirely.

Toyota sells vehicles in China through two joint ventures: FAW Toyota and GAC Toyota. The long-standing joint ventures produce and sell Toyota models, including the Corolla, RAV4, and Avalon, as well as new electric vehicles like the bZ3 and bZ5.

Last week, on September 28, GAC Group announced plans to acquire a 50% stake in FAW Toyota. The plans include issuing new A-shares priced at 5.75 yuan per share.

Under the agreement, GAC said that FAW Group would become its second-largest shareholder, but exact details would be finalized following an audit and once the valuation work was complete.

FAW Toyota was established in 2000 as a joint venture between FAW Group and Toyota, with each holding a 50% share. It was initially called Tianjin FAW Toyota Motor Co until 2003, when it adopted the name FAW Toyota.

Once the agreement is finalized, GAC Group would take FAW’s 50% stake, while Toyota would retain the other 50%. GAC said the deal would not change the controller.

The move was widely viewed as part of Toyota’s efforts to revamp slumping brand sales in China and streamline operations.

Since the announcement, several reports have claimed that FAW Toyota plans to exit the market completely and is slashing prices to sell down inventory.

FAW Toyota issued a statement on Monday night, refuting the false claims. The company said:

In response to false statements circulating on certain online platforms —such as claims that “FAW Toyota may completely exit the market” and “Toyota is slashing prices”—our company reserves the right to pursue legal action.

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