Toyota and Mazda strengthen ties

TOYOTA and Mazda have reinforced their partnership with each acquiring a 50 billion yen ($A5.69 billion) stake in the other, while announcing plans to build a new US production facility, as well as developing shared electric vehicle (EV) technologies and connected vehicle systems.

The share transaction will see Toyota Motor Corporation acquiring a 5.05 per cent share in Mazda Motor Corporation, while Mazda will control a 0.25 per cent share in Toyota, with both agreeing to the alliance “with the aim of further strengthening their lasting relationship”.

The first fruit born from the partnership is expected to be a joint-venture production plant in the US with equal funding contributions from both Japanese companies, expected to cost around $US1.6 billion ($A2.01 billion), with plans to open the 300,000 production-capable facility in 2021.

According to Mazda, the new factory will “produce crossover models that Mazda will newly introduce to the North American market” while for Toyota, it “plans to produce the Corolla for the North American market”.

With Mazda US already offering its CX-3, CX-5 and CX-9 SUVs, the new facility could accommodate production of the Mazda5-replacing CX-8 – which is currently only confirmed for the Japanese domestic market – after the people-mover was pulled from US soil in 2015.

The move to a US-based building facility is also expected to give Mazda a better foothold in the US market as it will “allow the company to more quickly respond to its customers’ needs depending on the region and model”.

On the other hand, Toyota will move production of its evergreen Corolla from a new facility currently under development in Guanajuato, Mexico to the US plant.

Toyota’s move comes seven months after Ford ditched its plans for a Mexico facility after US president Donald Trump threatened General Motors with heavy taxes for importing cars from south of the border.

In addition to the new facility, both Japanese car-makers will develop competitive electric vehicle technologies to “respond quickly to regulations and market trends in each country”, as well as exploring new vehicle-to-vehicle and vehicle-to-infrastructure communications technologies.

“Specific details of the collaboration will be determined as the companies work together going forward,” the brands said in a joint statement.

At present, Mazda supplies its Mazda2 sedan to Toyota in the North American market, which is rebadged as a Yaris iA, while Toyota is set to supply Mazda with a “compact commercial ‘two-box’ van” in the Japanese market.

Toyota president Akio Toyoda said the relationship will push the car-making giant to further heights.

“The greatest fruit of our partnership with Mazda is that we have found a new partner who truly loves cars,” he said.

“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 realisation of our desire to never let cars become commodities.”

Meanwhile, Mazda president and CEO Masamichi Kogai shared similar sentiments, stating: “Nothing would please me more than if, through this alliance, we can help to energise 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.”