Toyota and Mazda Announce Alliance and $1.6 Billion Joint Venture in US

Toyota and Mazda have announced a significant new partnership: the two companies have agreed to take capital stakes in each other to fortify their financial position against their competitors. Toyota will take a 5% stake in the Mazda Motor Corporation, and Mazda will fund a 0.25% stake in the Toyota Motor Corporation.

The two automakers said that the alliance will allow them to invest in new technology and go on the offensive against their rivals. Through this deal, the two manufacturers have agreed to build a new assembly plant in the United States for $1.6 billion. The joint venture will have a capacity of over 250,000 vehicles a year. We don’t know which models will be built at the new plant, but observers speculate that Toyota is making room for their updated Corolla and Mazda is looking to expand their crossover and SUV segments.

The two companies hope to have the new facility up and running by 2021. The plant will help both manufacturers cope with the increased demand in the light truck and crossover categories, which continue to see increasing demand from consumers. This venture will also allow the companies to collaborate more in the development and manufacturing of electrified vehicles.

The companies were clear to state that Toyota had not purchased and is not planning to purchase Mazda that each company will continue to have independent management and corporate cultures, but they did leave the door open to add greater stakes in the future.