Toyota, Mazda to form capital tie-up, build joint factory in US

August 4, 2017

TOKYO- Toyota Motor Corp. and Mazda Motor Corp. said Friday that they have agreed to form a capital tie-up and promote joint development of electric vehicle and other leading technologies while building a joint assembly plant in the United States.

Through the partnership, the two major Japanese automakers aim to survive intensifying competition in the global auto industry in new circumstances including the accelerating development of next-generation technologies and diversifying needs.

The move will realign the domestic auto industry into three major camps: Toyota, Nissan Motor Co. which has Mitsubishi Motors Corp. under its umbrella, and Honda Motor Co. which is promoting collaboration with companies in other sectors.

According to their announcement, Toyota will take a 5.05 pct stake in Mazda by underwriting Mazda shares totaling 50 billion yen to be issued through a third-party allotment scheme. Mazda will acquire 0.25 pct of all outstanding Toyota shares.

They will invest a total of around 1.6 billion dollars in the joint U.S. plant, aiming to start operations there in 2021. The new plant will have an annual production capacity of some 300,000 vehicles and offer 4,000 jobs.

The joint plant will produce Mazda's new sport-utility vehicle model for the North American market and Toyota's Corolla sedan for the region. It will be equipped with a flexible production system that can be used for other models.

Toyota and Mazda will also collaborate on Internet-connected cars and advanced safety technologies, while considering joint development of basic technologies for electric vehicles.

Since the two companies announced a comprehensive partnership focusing on environmental and advanced safety technologies in May 2015, they have been working to draw up details of joint projects.

Meanwhile, Toyota Motor Corp. chairman Takeshi Uchiyamada expressed confidence in developing next-generation eco-friendly automobiles, at an event celebrating the 20th anniversary of its first mass-production hybrid vehicle model Prius.

"Hybrid vehicles have all the elements of electrification technology," Uchiyamada said at the event held at the Makuhari Messe convention center in the city of Chiba, east of Tokyo.

He thus expressed his confidence in developing all-electric and other next-generation vehicles that will follow gas-electric hybrid models. Uchiyamada was in charge of developing the first Prius model, which hit the market in 1997. Jiji Press