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Toyota and Mazda to jointly build a $1.6 Billion US Assembly Plant

05 August 2017

In the news release, Toyota laid out the details of its partnership with Mazda in that the two will produce USA vehicles under the same roof, develop new technology for electric vehicles together.

"The plant will require a total investment of approximately 1.6 billion US dollars, and will create up to 4,000 jobs", the press release said.

The US-based manufacturing plant is set to begin operations in 2021, and is expected to produce around 300,000 vehicles per year, with the output divided between both firms. But because the new plant will build the Corolla, chances are it will be located near Toyota's current Corolla plant in MS to be close to parts supply companies.

He has strongly criticised Toyota over its ongoing project to build a new factory in Mexico, threatening it with tariffs. "We intend to submit a proposal to our board of directors today regarding the partnership with Mazda, however, we would like to refrain from providing further comment at this time", the statement read. For Mazda, the plant's opening would mark the first time it is building cars in the USA since it stopped manufacturing vehicles with Ford in 2012 in MI.

Toyota, which has been vying against the Japan-France alliance of Nissan-Renault, Volkswagen AG of Germany and US manufacturer General Motors Co. for the spot of world's No. 1 automaker, stuck to its earlier projection for global vehicle sales for the fiscal year at 10.25 million vehicles. The two Japanese automakers, which had been contemplating a possible business alliance, judged it necessary to strengthen their partnership. In a tweet, President Trump - who had criticised that plan - called the new deal "a great investment in American manufacturing!".

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The two have also agreed to join forces to develop electric auto technology. The planned auto plant will create about 4,000 jobs.

With the Prius and other hybrids, Toyota has dominated the market for lower-emissions vehicles for years. In 2015, the two manufacturers also agreed to link up in the development of environmental and safety technologies and have since been considering concrete measures.

As well as Toyota taking a 5% stake in Mazda, the tie-up will also see Mazda take a small stake in its larger rival.

The companies have not announced exactly where the new plant will be built.

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

Toyota and Mazda to jointly build a $1.6 Billion US Assembly Plant