Toyota, Mazda plan joint plant in U.S., electric-car cooperation: updated

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2017 Mazda CX-5 First Drive

2017 Mazda CX-5 First Drive

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Toyota is one of the largest global automakers, while Mazda is one of the smallest.

This morning, the two Japanese makers announced a capital-investment deal under which Toyota would take a small shareholding in Mazda, the smaller maker would invest in Toyota as well, and the two would set up a joint U.S. assembly plant.

The two makers also said they would cooperate on electric-vehicle technology, as well as connected-car and advanced safety technologies.

DON'T MISS: Mazda to offer electric car in 2019, maybe with range extender?

The vehicles to be produced at the shared plant will be the Toyota Corolla compact sedan and a new crossover utility vehicle for Mazda.

A report from Nikkei Asian Review suggests the new plant is to be located in the U.S. South with capacity for up to 300,000 vehicles a year.

This follows the model of each maker is building its own products, as in the Indiana plant where Subaru built Legacys and Outbacks in one half while Toyota built Camrys in the other half. Subaru took back the whole plant two years ago.

Toyota chief Akio Toyoda (left) and Mazda chief Masamichi Kogai

Toyota chief Akio Toyoda (left) and Mazda chief Masamichi Kogai

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In a joint statement released at a press conference held this morning in Japan, the companies said:

Toyota Motor Corporation (Toyota) and Mazda Motor Corporation (Mazda) signed an agreement today to enter a business and capital alliance, with the aim of further strengthening their lasting partnership.
 
Today’s agreement is a testament to the positive result of two years of collaborative and deliberate discussions between the two companies, and it is a milestone in the journey to further strengthen and accelerate the partnership in a sustainable way.

READ THIS: Mazda To Lean On Toyota For Hybrid, Fuel-Cell Expertise (May 2015)

An earlier 2015 pact between Mazda and Toyota created a technology exchange that would permit Mazda to offer partial zero-emission vehicles in 2019 or 2020 to satisfy regulatory requirements from the California Air Resources Board.

The two makers' compact crossover vehicles—the Toyota RAV4 and Mazda CX-5—are among their highest-selling models in North America as buyer interest in sedans wanes.

Mazda ended production in 2012 at its sole U.S. plant in Flat Rock, Michigan, and handed the plant back to its former part-owner Ford, which now builds Mustang sport coupes and convertibles there.

2017 Toyota RAV4

2017 Toyota RAV4

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Toyota builds RAV4s in North America, but has suffered from production constraints as sales have risen to roughly 400,000 a year and the RAV4 has overtaken the company's compact and mid-size sedans.

Separately, the continuing cooperation on electric cars takes a pair of companies that both lag in offering vehicles that plug in to recharge battery packs.

Toyota is significantly behind other automakers of its size—Renault Nissan Alliance, VW Group, and General Motors—and tiny Mazda has few known plans for plug-in vehicles beyond minimal compliance with California zero-emission vehicle sales requirements in 2019 or 2020.

CHECK OUT: Toyota to offer electric car in 2020 as fuel-cell sales struggle

The two companies have collaborated already on two projects: Toyota supplied hybrid powertrain components for a Mazda 3 Hybrid version not sold in the U.S.

Mazda is also manufacturing the 2017 Toyota Yaris iA (nee Scion iA) subcompact sedan; the iA built in Mexico, for sale in North America only, is the Mazda2 sedan in the rest of the world.

The 2015 announcement by the two companies followed media reports that Mazda and Toyota had reached a deal in which the smaller company would borrow the larger company's fuel-cell and hybrid technology for future models.

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