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Toyota & Mazda Partnering For New Assembly Facility In US & EV Tech

06 August 2017, 01:39 | Clyde Nash

Two large rival car giants are reportedly joining forces for a new venture

Toyota and Mazda To Build US Plant -- WSJ

Toyota, which is strong in hybrid vehicles but has been behind in entering the electric vehicle market, apparently judged it necessary to strengthen the development of electric cars in cooperation with Mazda. The alliance is also an attempt to catch up with rivals in the race for electric vehicle technology, as tighter global emissions rules loom, along with the entry of new players into the market.

Concerning joint model development, badge engineering and platform sharing, the two companies have pledged to "further explore the possibilities of ... complementary products on a global level". "We can not comment any further".

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

"Toyota and Mazda have been working more closely together, so it is no surprise they will have a plant together", Autotrader.com analyst Michelle Krebs said, adding that Mazda had been searching for US manufacturing capacity.

Instead it will produce Tacoma pickups there, Toyota President Akio Toyoda said. The value of the shares mutually acquired by both companies will be equivalent.

"Toyota may benefit from a taste of Mazda's zoom-zoom flavour and add to its global volume count, but most of the benefit of the link-up goes to Mazda, which desperately needs USA production in this protectionist era and help with advanced technology development", Michelle Krebs, analyst for Autotrader, an online marketplace for auto shoppers and sellers, said in a statement.

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

In North America, Toyota builds Corolla cars in Canada and MS and announced plans in 2015 to shift Canadian Corolla production to a new $US1b ($F2b) plant in Mexico. He called it "a great investment in American manufacturing" in a Friday morning tweet.

Toyota initially had been planning to produce Corollas at its new $1 billion plant now under construction in Mexico, but this will shift to the United States, and the automaker will instead produce its Tacoma truck model in Mexico. But in joining with Mazda, the company opted to find a location in the US, which would mark the first time Mazda has built a auto in the USA after Ford sold its ownership in the company in 2008. From a company that imported all its vehicles from Japan, Toyota has transformed into a company building 70 percent in North America, its North America Chief Executive Officer Jim Lentz said. Mazda does not now have any factories in the U.S.

"We're in the process of preparing for our current volumes to be projected, and at this moment, we don't see any big change for us".

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

Toyota and Mazda Motor Corp. are set to announce a partnership, according to a source familiar with the matter.

This means, starting from the beginning of October, Toyota will own 5.05 per cent of Mazda's common stock, while Mazda will have a 0.25 per cent stake in Toyota.

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

The plant, whose location is not yet public, will be able to produce 300,000 vehicles a year, with production divided between the two automakers, and employ about 4,000 people. "It makes ideal sense that they would join with Toyota and help spread the cost of building the plant and producing the vehicles".

"We have a lot of confidence in the USA economy", Lentz said. "It is also the realization of our desire to never let cars become commodities". They also will make electric vehicles to compete with Tesla, Google and other technology companies.

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.

Analysts said the plan was more than a political ploy.

Toyota is undergoing a full-fledged shift to TNGA, which is adding to the forecast in capital expenditure, Otake said.

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