Toyota buys stake in Mazda, joint U.S. factory, EV development planned

Toyota buys stake in Mazda, joint U.S. factory, EV development planned

Toyota and Mazda joining forces, announcing their plans Friday to build a $1.6 billion plant in the US with a focus on developing electric vehicle technologies.

As part of their new partnership agreement, the two companies are looking to setup a new factory in the US by 2021.

Toyota will obtain a 5.05 per cent stake in Mazda while Mazda will gain a 0.25 per cent stake in Toyota. The two Japanese automakers also will work together on electric-car technology.

Tougher carbon emissions regulations in Europe, the US and China have spurred a global shift toward battery-powered cars. The plant, something of a surprise at a time of overcapacity in the U.S. market, will be a boost to U.S. President Donald Trump, who campaigned on promises to increase manufacturing and expand employment for American autoworkers.

In 2015, Toyota and Mazda agreed to work together to use the resources of both companies and "complementing each other's products and technologies toward the goal of making more-appealing cars".

The sheer cost of the plant also makes a partnership logical, as it boosts cost-efficiency and economies of scale.

Volvo Cars, a Swedish brand owned by China's Geely Automobile Holdings Ltd [0175.HK] [GEELY.UL] will open a $500 million US assembly plant next year in SC. Toyota will continue to assemble its Corolla compact sedan in Blue Springs, Mississippi and the automaker will want to take advantage of the supply chain built up around that location. On Friday, the Japanese firm said it now plans to produce Tacoma pickup trucks at the plant in Mexico instead of the Corolla.

Toyota Motor Corp and Mazda Motor Corp are nearing a deal to buy stakes in one another and jointly build a US$1.6bil U.S. factory, according to people familiar with the matter.

Yesterday Mr Trump praised the new factory as "a great investment in American manufacturing". Mazda has not made cars in the US since a joint partnership with Ford unraveled earlier this decade.




The plant will have an annual production capacity of about 300,000 vehicles, and will produce Toyota Corollas for the North American market.

The next Corolla will be built on the Toyota New Global Architecture (TNGA) that underpins the 2018 Camry.

Through last year, Toyota has sold more than 300,000 Corollas in the USA for four consecutive years. But recent breakthroughs in batteries allow for longer travel per charge.

The last time Mazda made a vehicle in the States was 2012, right before the company sold its 50 per cent share in the AutoAlliance factory in Flat Rock, Michigan, back to Ford.

The Mazda CX-4 unveiled at the 2016 Beijing Motor Show is a CX-5-based crossover with a lower, fastback roofline.

It already owns a 16.5 percent stake in Subaru Corp, Japan´s No.6 automaker, with which it also has a development partnership. They also will make electric vehicles to compete with Tesla, Google and other technology companies.

Meanwhile, Mazda, which has developed its original fuel-saving technology, has been behind in the field of electric vehicles.

In return, Mazda will rebadge one of Toyota's two-box vans for the Japanese market, possibly as a replacement for the Bongo (E-Series) range.

Botkin said the decision to build won't be Toyota's alone, with Mazda having a say-so in the ultimate decision. Toyota purchased about 10 percent of Fuji Heavy Industries/Subaru after General Motors sold its 20-percent stake in Subaru in 2005.

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