An illustration showing the Toyota logo ( Image Source: Pixabay) Photograph: (Others)
The two automakers will together produce 300,000 vehicles per year. The company will start in 2021 is expected to provide employment to about 4000 people.
Toyota and Mazda Motor plan to build an assembly plant along with electric vehicle technologies, the deal would be worth $1.6 billion
.The two motor companies will also produce in-car information technologies and automated driving functions.
Toyota will take 5 per cent shares of Mazda while the latter will take 0.25 per cent share from Toyota for the tie-up. The automakers plan to produce Toyota Corollas and a new Mazda SUV crossover at the new plant.
The new alliance will no doubt come as a piece of good news for the Trump administration which has promised increased car manufacturing inside America.
The two automakers will together produce 300,000 vehicles every year. The company will start manufacturing cars in 2021 and is expected to provide employment to about 4,000 people.
CLSA managing director Chris Richter said, "For a technology company which lacks the expertise in making cars, Mazda could look like a very interesting acquisition. They're very good, they're not too expensive. Maybe Toyota realizes this", Reuters reported.
"By buying a 5 per cent stake, Toyota takes Mazda off the table rather than having it sit out there like a free agent which could someday be used against them."
Mazda will benefit from the deal that gives the small automaker a production foothold in the United States. At the moment, Mazda ships all vehicles sold in the country to its biggest market from its plants in Japan and Mexico.