Published: Sat, August 05, 2017
Markets | By Terence Owen

Toyota, Mazda sign capital alliance deal

Toyota, Mazda sign capital alliance deal

On Friday (4 August), the Japanese vehicle giants said they will join forces to invest $1.6bn in the plant with a capacity to produce 300,000 units a year, and generate employment for up to 4,000 people.

In a tweet early Friday morning, Trump praised Toyota and Mazda for investing $1.6 billion in a new USA assembly plant. However, as Mazda mainly builds cars in Mexico and Japan, it should help the brand save some dosh when it comes to the threat of further import duties threatened by current US President, Donald Trump, too.

Toyota and Mazda have agreed a business alliance that will involve the two Japanese firms working together to develop new technology, including electric vehicles (EVs). That's why Toyota and Mazda are now teaming up to build electric cars together.

"Mazda has been producing the Toyota Yaris iA and now the Yaris for us in Mexico, so we've had this relationship with them for a couple of years", said Toyota's North America CEO Jim Lentz in an interview with Dallas Morning News.

"Now we face a battle with new rivals mainly in emerging markets and also a battle with IT companies such as Apple and Google", Toyota president Akio Toyoda said at a press conference. Toyota will buy 5.05 percent of Mazda, worth about $451,247,500 (50 billion yen).

Toyota has plants in Indiana, Kentucky and Texas.

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There are plans to jointly develop electric vehicle tech 'for the basic structure of competitive electric vehicles'.

Mazda had previously operated with Ford Motor Co.in a joint venture in the U.S. Toyota has worked with Subaru and others. In recent years, Japanese auto makers have shifted more manufacturing to North America to be closer to the USA market and reduce exposure to currency fluctuations. And while Toyota plans to supply a commercial van for Mazda to sell in Japan, there aren't now any plans for the automakers to share other vehicles with each other. Toyota said in January it plans to invest $10 billion in the United States over the next five years to meet demand.

Toyota has already invested $23.4 billion in its USA operations, and has planned another $11.6 billion in investment over the next five years, fueled by robust profits.

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the USA print edition of The Wall Street Journal (August 4, 2017).

He has strongly criticised Toyota over its ongoing project to build a new factory in Mexico, threatening it with tariffs.

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