Toyota, Mazda mull joint plant in US

The automakers will discuss building a plant together in the southern U.S
The automakers will discuss building a plant together in the southern U.S
Author

05 August, 2017

Toyota has agreed to purchase a five percent stake in Mazda, and will build a joint plant in the US worth $1.6 billion, the automaker revealed today.

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 big news is the announcement of a $1.6 billion plant for the United States.

The plant will be capable of producing 300,000 vehicles a year, with production divided between the two automakers, and employ about 4,000 people.

Analysts from Citi said: "The reported plan to build a new plant in the USA looks rational given that SUV capacity is tight at both companies and protectionism concerns remain". At Toyota's new plant in Guanajuato, Mexico, which is now under construction, Toyota plans to produce the Tacoma, instead of the Corolla.

The companies are also expected to announce investments in each other.

"They're going to start looking at sites to look at the best benefits for Toyota and Mazda". Toyota, which makes the Prius hybrid, Camry sedan and Lexus luxury models, already provides hybrid technology to Mazda, which makes compact cars for Toyota at its Mexico plant.

Toyota lost its title as the world's top automaker to Volkswagen in 2016 after four consecutive years of dominance.

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The Nikkei newspaper reported earlier the capital tie-up and plans for a USA vehicle plant, without saying where it got the information.

The Japanese automakers said in a statement Friday that the facility would be operational by 2021, but did not specify where it would be built.

However it's not only electric cars that will benefit from the partnership.

Toyota has been creating alliances with Japanese rivals for years.

Along with a boost in USA production capacity last year, Okada said this strategy would "help our numbers going forward", while cautioning that US selling incentives would increase this year as competition remains fierce. According to reports, Toyota won't have an offering in this segment until early next decade.

Shares in Mazda, which has no USA plant, soared more than 5 percent in Tokyo trade early Friday while Toyota was marginally lower. Hiroshima-based Mazda has no plants in the US.

President Trump has made it a priority to push foreign automobile companies to set-up in the U.S.


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