Toyota and Mazda to form a capital alliance on an electric vehicle plant in the U.S., worth USD 1.6 billion

Published Date : 04 Aug 2017


Mazda Motors and Toyota, the two top-of-the-line Japanese automotive giants, have recently inked an agreement to pave the way for establishing a joint venture auto plant in the United States. Though the site of the plant has not yet been disclosed by either of the two mammoths, the plan envisions a major factory that would hold a production capacity of 300,000 vehicles per year, cite reliable sources. Reportedly this new plant is anticipated to be onboard by 2021, creating 4000 job opportunities for American autoworkers. The move also signals significant political implications, given Trump’s continuous effort of pushing foreign automakers in America.

The new deal is just an extrapolation of the long-term partnership between Mazda and Toyota, as both the firms had been planning to work hand in hand with regards to electric vehicles development and connected car technologies over the past few years, confirm reliable sources. The two Japanese automakers are negotiating on their premise and it is reported that Toyota would account for a 5% stake in Mazda Motor.

Both Toyota and Mazda have a market history of various collaborations with other automakers. Mazda has had a long-term alliance with Ford Motor while Toyota has worked with General Motors on an assembly plant in California, that was closed in the year 2010. A capital tie up with the Hiroshima based automaker, Mazda, is counted as the latest addition to Toyota’s sprawling empire. This collaboration, as per market experts, will bring reciprocal benefits to both the firms, allowing for a more flexible and expanded plant capacity. In addition, the monetary aspect linked with the development of electric vehicles and advanced technologies would also be better handled.

Toyota is among the major global automakers who have been pushed into electric vehicles by stringent environmental standards. As electrification and technological proliferations transform the competitive landscape of the automotive industry, Toyota is bringing forth a slew of projects to stay afloat. Toyota and Mazda Motors, with this joint venture look forward to bringing advanced connected car technologies in the market by exploiting their respective strengths. Furthermore, the two companies have been facing challenges from the risk of protectionist trade policies in America under the Trump administration. The assembly plant is likely to soften the risk for both the companies, to an extent, state experts.

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