FAW 35.8% Equity Acquisition Case Announced, Set to Become Zhuoyu Technology's Largest Shareholder

On September 22, the official website of the State Administration for Market Regulation announced the case of China FAW Group Corporation's acquisition of shares in Shenzhen Zhuoyu Technology Co., Ltd.

According to the public information, FAW Group has signed an agreement with New Territory Technology Company Limited (referred to as "New Territory") and Zhuoyu Technology to increase its capital and acquire a portion of the equity in Zhuoyu Technology held by New Territory.

Image source: State Administration for Market Regulation

Before the transaction, New Territory held 70.65% of the equity in Zhuoyutec, controlling the company independently; after the transaction is completed, FAW Group will hold 35.80% of Zhuoyutec's equity, becoming the largest single shareholder, while New Territory's shareholding ratio will decrease to 34.85%, resulting in a joint control relationship between the two parties.

Zhuoyou Technology is a high-tech company focused on advanced driver assistance systems (ADAS). It was formerly the automotive division of DJI and became independent in 2023. The "Zhuoyou" brand name will be officially launched for independent operations in June 2024.

The company is renowned for its low-cost, high-value intelligent driving assistance solutions, claiming that only 32 TOPS of computing power is needed to achieve highway navigation functionality, while 100 TOPS can support city navigation. Its technological approach emphasizes "intelligence for both fuel and electric," meaning the same intelligent driving system can be applied to both fuel vehicles and new energy vehicles. This characteristic gives it a differentiated advantage in overseas markets and the intelligent transformation of traditional fuel vehicles.

Currently, Zhuoyu Technology has established partnerships with several car manufacturers, including Volkswagen, SAIC-GM-Wuling, Chery Automobile, China FAW, Dongfeng Motor, and Great Wall Motors. Its technology has been applied to certain models of the Hongqi brand under FAW.

This equity transaction not only changes the control structure of Zhuoyu Technology but also injects new momentum into FAW Group's strategic layout in the field of intelligent connected vehicles.

FAW Group, as a leading enterprise in China's automotive industry, is primarily engaged in the development, production, and sales of passenger and commercial vehicles, with its ultimate controller being China First Automobile Group Co., Ltd.

Through this acquisition, FAW can quickly enhance its technological strength in the ADAS field, accelerate the commercialization of intelligent driving technology, and strengthen its influence over the intelligent driving supply chain. For Zhuoyue Technology, relying on FAW's strong vehicle manufacturing capabilities and market resources, its technological research and development and product implementation will receive stronger support.

Notably, the shareholder lineup of Zhuoyu Technology previously included several car manufacturers. In December 2024, BYD, through its subsidiary Shenzhen BYD Chuangxin Materials Co., Ltd., acquired a stake in Zhuoyu Technology, with a shareholding ratio exceeding 5%. The entry of FAW further strengthens Zhuoyu Technology's role as a collaborative platform between car manufacturers and technology companies.

From an industry perspective, this transaction reflects the trend of deeper integration between automobile manufacturers and smart driving technology suppliers. As the automotive industry transitions towards intelligence and connectivity, car manufacturers are no longer content with externally sourcing technology solutions. Instead, they are achieving supply chain integration and collaborative innovation through capital involvement.

The regulatory authorities have classified this case as a simplified case because neither party's market share has reached the antitrust threshold: Zhuo Yu Technology's market share in the ADAS market within China is less than 5%, while FAW Group's market share in the passenger and commercial vehicle markets is 10-15% and 5-10% respectively. The subsequent implementation of the transaction and the effectiveness of the business synergy between the two parties are worth continuous attention from the market.