Hino Motors said it had agreed to cut its stake in its joint venture with Chinese state-owned automaker Guangzhou Automobile Group to focus on other key markets.

Toyota’s truck-making subsidiary said it would reduce its stake in GAC Hino Motors, a company based in Guangzhou in southern China producing and selling commercial vehicles for local sale, from 50% to 4.83%.

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The restructuring was scheduled to be completed by the end of January, once all formalities had been completed.

Guangzhou Automobile Group is set to acquire an additional 39.72% stake in the joint venture from Hino, increasing its holding to 89.73%, with a further 5.45% stake to be bought by Gaungzhou Qingyun New Energy Technology Investment Partnership, a company which manages the employee stock ownership plan of GAC Hino.

Hino said it decided to cut its stake GAC Hino during an internal board meeting last October in response to the company’s sluggish performance in China’s vast commercial vehicle market, reflecting strong competition from local manufacturers and also the accelerating change to new energy vehicles.

The joint venture, established in 2007, was estimated to have sold less than 2,000 vehicles last year.

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Hino said Guangzhou Automobile Group would take management control of the company “to facilitate the transformation of the business model of GAC Hino into the one centred around new energy vehicles”.

The company said it would use the CNY34m (US$5m) generated from the sale to pay for the capital increase which would be undertaken by GAC Hino shareholders.