Mazda and Toyota Take Their Relationship to the Next Level, Start Planning an Assembly Plant
Toyota Motor Corp. is set to strike a deal to take a 5-percent stake in fellow Japanese automaker Mazda Motor Corp. The alliance includes the construction of a joint-venture $1.6 billion U.S. automotive plant and sharing EV technology — showing that Mazda hasn’t totally sworn off the idea of an electric car.
The two companies have been dating casually for a couple of years; Toyota sometimes uses Mazda’s Mexican factory to build compact cars, the two have fostered a love child (the Mazda 2-based Toyota Yaris iA), but this is the first time they’ve seriously considered moving in together. Toyota claimed the decision was about more than just a strategy to share technology, suggesting the automakers had genuine feelings for one another.
“The greatest fruit of our partnership with Mazda is that we have found a new partner who truly loves cars,” Toyota President Akio Toyoda said in a statement, “It has also sparked Toyota’s competitive spirit, increasing our sense of not wanting to be bested by Mazda. This is a partnership in which those who are passionate about cars will work together to make ever-better cars. It is also the realization of our desire to never let cars become commodities.”
However Toyota doesn’t want to be tied down to one company. The brand also has a 16.5 percent stake in Subaru, and explained that its 2015 technology-sharing foray was “an engagement announcement, not a marriage announcement.”
The wedding is definitely still on.
“Nothing would please me more than if, through this alliance, we can help to energize the auto industry and create more car fans by bringing together two competitive spirits to spur each other on, leading to innovations and fostering talent and leaders,” said Mazda CEO Masamichi Kogai of the union.
While the partnership helps keep Toyota as the world’s largest carmaker, Mazda has the most to gain. With no production facilities within the United States, there’s definitely some apprehension about what might happen if Donald Trump delivers on his protectionist promises — especially since North America makes up the over a third of Mazda’s revenue (and 21 percent of it operating profits in 2016).
With an R&D budget of roughly 140 billion yen ($1.27 billion) for 2017, Mazda also lacks the funds to develop electric cars on its own — a problem shared by Subaru and Suzuki. However, Toyota swooped in with a sack of money to help them while also helping itself.
At the new U.S. factory, Mazda intends to produce jointly developed models specifically for the North American market, while Toyota plans to build the Corolla. Excess Tacoma production will be sent over to the company’s new Mexican facility, which was originally built to handle the Corolla.
Pending approval from relevant government agencies, the companies will begin to examine detailed plans with the goal to start operations at the new plant by 2021. Toyota claims it will have capacity of approximately 300,000 units and create 4,000 American jobs.
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