Toyota Motor Corporation (Toyota) and Mazda Motor Corporation (Mazda) signed an agreement to enter into a business and capital alliance to create a US$1.6 billion joint-venture auto manufacturing plant in the U.S. with an annual production capacity of about 300,000 vehicles. The plant is scheduled to begin operations by 2021. Mazda plans to build new crossover vehicles for the U.S. market at the plant, while Toyota will produce its Corolla model there. The move could create as many as 4,000 new jobs.
The agreement is a milestone to further strengthen and accelerate the partnership in a sustainable way. The companies agreed to: 1) establish a joint venture that produces vehicles in the United States, 2) jointly develop technologies for electric vehicles, 3) jointly develop connected-car technology, 4) collaborate on advanced safety technologies and 5) expand complementary products.
In addition, Toyota and Mazda agreed to a capital alliance arrangement preserving independence and equality for both companies. In the capital tie-up, the two companies have agreed that Toyota will subscribe for and acquire shares to be newly issued by Mazda through a third-party allotment, and at the same time Mazda will subscribe for and acquire third-party allocation shares of treasury stock disposed of by Toyota in the equivalent amount in value to the Mazda shares.
“The greatest fruit of our partnership with Mazda is that we have found a new partner who truly loves cars. 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 realization of our desire to never let cars become commodities”, said, Akio Toyoda, Toyota President.
Masamichi Kogai, President, and CEO, Mazda, said, “Nothing would please me more than if, through this alliance, we can help to energize 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.”