Toyota and Mazda to spend $1.6 billion on joint United States plant

Toyota and Mazda to spend $1.6 billion on joint United States plant

Toyota and Mazda to spend $1.6 billion on joint United States plant

The Corolla will be located at the new factory in the USA, which will be established as a joint venture between Toyota and Mazda and will open by 2021. The alliance is also an attempt to catch up with rivals in the race for electric auto technology, as tighter global emissions rules loom, along with the entry of new players into the market. "The reality is that if we don't shift further in that direction, we won't survive the upcoming competition".

Botkin said the decision to build won't be Toyota's alone, with Mazda having a say-so in the ultimate decision.

Toyota said it will take a 5.05 percent stake in Mazda for ¥50 billion while Mazda will take 0.05 percent stake in Toyota.

Indeed, the plant reached 500,000 cars faster than any other plant in Toyota history, and previous year it won a coveted J.D. Power Initial Quality award. "That's why I feel it has become increasingly important for us automakers to gather new partners without seeing things in confrontational perspectives".

"We're going to concentrate only on pickups at the beginning and are studying the potential for SUVs in the future", Lozano said.

"What's different from the past is that there are no nautical charts for us to follow".

"At the new plant, Mazda expects to produce cross-over models that Mazda will newly introduce to the North American market, and Toyota plans to produce the Corolla for the North American market. A great investment in American manufacturing!"

Under this relationship, Toyota and Mazda will bolster their operations in the United States, their biggest market, and invest $1.6 billion in a new factory and create up to 4,000 new jobs.

Taken together, the plans are likely to be trumpeted as a victory for President Trump's push to manufacture more locally sold vehicles in the U.S. He had threatened Toyota and other auto companies for selling cars to American customers that were built elsewhere.

Mazda lacks any USA factories, which exposes one of Japan's smallest carmakers to both trade and currency risk.

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Toyota noted the growing competition from newcomers in the auto industry like Google, Apple and Amazon, stressing he was anxious about autos turning into commodities.

The two companies plan to take investment stakes in each other.

According to Zacks, "Mazda Motor Corp. engages in the manufacture and sale of passenger cars, commercial vehicles and automotive parts".

The two companies will consider further strengthening capital tie-up "in line with the progress" of the alliance.

The plant will have the capacity to produce 300,000 Toyota Corolla compact cars and Mazda crossovers per year, said the people, who asked not to be identified ahead of the companies making an official announcement.

With an R&D budget of around 140 billion yen ($1.27 billion) this year, a fraction of Toyota's 1 trillion yen, Mazda lacks the funds to develop electric cars on its own, a predicament shared by Subaru and Suzuki. Even with the improved outlook, the automaker is projecting a second consecutive annual profit decline, which would be a first since 1994.

Toyota has said it plans to invest $10 billion in the US over the next five years.

He was appointed a year ago to lead Toyota's newly formed electric vehicle division, flagging the group's commitment to a technology it has been slow to embrace.

The sweeping partnership between the two companies includes investments in each other and collaboration on development of electric vehicles and self-driving auto technology.

The automaker has yet to realize the full benefits of a revamped manufacturing process, based on using common components that it calls the TNGA for short. It has announced a plan to add more than 30 models to its lineup and sell 1 million EVs per year by 2025.

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