Japanese automakers Toyota and Mazda are forming an alliance to build a new $1.6 billion U.S. assembly plant and work together to manufacture electric vehicles. Mazda announced on Friday that it planned to issue new shares to Toyota worth 50 billion yen, or about $450 billion, which would give Toyota a 5 percent ownership stake in its fellow automaker.
The factory’s location has yet to be decided, but the companies say the it will start operating from 2021. It will produce up to 300,000 vehicles a year and employ around 4,000 workers. Toyota and Mazda plan to work together on developing in-car information technologies, advanced driver-assistance systems and autonomous technology.
The alliance between Toyota and Mazda is a significant step for both companies in catching up with the market leaders in highly competitive the electric vehicle market. According to the Electric Vehicles Market report, the market is forecast to reach $731 billion by 2027, with analysts expecting it to profoundly change society by 2037.
"The industry pace of electrification has really picked up," Toyota Chairman Takeshi Uchiyamada said at an event outside Tokyo.
"We have been reviewing the best production strategy for our business," Chief Executive Akio Toyoda, grandson of the company's founder, told a news conference in Tokyo. "There will be new rivals appearing - Apple (AAPL.O), Google (GOOGL.O) - these are IT companies, we also need to compete with them, too.”
President Trump also welcomed the announcement in a Tweet: "Toyota & Mazda to build a new $1.6B plant here in the U.S.A. and create 4K new American jobs. A great investment in American manufacturing!"
Toyoda said in January recently that the company would invest $10 billion in the United States over the next five years.
Stay up-to-date with the latest trending news stories and industry advances with the Research and Markets blog. Don’t forget to connect with us on LinkedIn and Twitter for the latest blog plus information about new products.