MOTORING NEWS - Toyota announced in August that it was taking a 5% stake in Mazda. The announcement added that the companies would jointly build an assembly plant in the US and would pool resources on new technology.
Toyota will produce the Corolla model for the North American market, while Mazda will build cross-over models.
For Toyota, the investment is a push to expand United States vehicle-making capacity and market share and intensify its attack on the lucrative truck business.
The companies hope to open the plant for the Toyota Corolla and Mazda cross-over vehicles in 2021.
The budget for this move predates the election of President Donald Trump, but the announcement was widely seen as a response to Trump's vows to promote USA manufacturing, pushing back against countries like Japan that have large trade surpluses with the United States.
Trump customarily welcomed the announcement in a tweet welcoming the creation of 4 000 new American jobs. "A great investment in American manufacturing!" he commented.
The strategic plan of producing electric vehicles have come in the light of stricter global emissions regulations, driving more and more car manufacturers to develop battery-powered vehicles.
The two Japanese manufacturers will exchange shares to complete the transaction. Japanese rival Nissan is allied with Renault of France and Mitsubishi Motors and is the global leader in electric vehicles.
Mazda makes compact cars for Toyota at its Mexico plant and Toyota already provides hybrid technology to Mazda.
Working together on green and other technology makes sense as the segment becomes increasingly competitive due to concerns about global warming, the environment and safety. Ford began cutting ties with Mazda in 2008 and has sold its stake in the company.
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