Mazda and Toyota team up in US

Georgetown Kentucky Toyota Plant

President Masamichi Kogai shake hands after a press conference in Tokyo Friday, Aug. 4, 2017.

Toyota Motor Corp. and Mazda Motor Corp. are planning to build an assembly plant in the USA for $1.6 billion, the two companies announced on Friday, as part of their alliance that also sees the two automakers from Japan jointly developing technologies for electric vehicles.

Japanese automakers Toyota Motor Corp. and Mazda Motor Corp. plan to spend $1.6 billion to jointly build auto manufacturing plant in the USA - a move that will create up to 4,000 jobs, both sides said Friday.

Toyota wouldn't say where the plant would be built. Shifting production of those cars from a plant in Canada enables Toyota to boost output of the RAV4 crossover.

The companies hope to be able to start production in 2021.

Toyota had initially been planning to produce Corollas at its new $1bn plant currently under construction in Mexico, but this will now shift to the US.

Toyota said in a statement that the two companies have been exploring various areas of collaboration under a May 2015 agreement. Toyoda denied that Trump's views influenced his decision.

A new USA assembly plant would likely become the prize in a fierce competition among Midwestern and Southern states eager to expand manufacturing jobs. At the time, the automaker was considering making cars for the USA market in Mexico. Corolla sales fell 10 percent through July.

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Mazda would also take a stake in Toyota, the report said.

In May, Toyota had predicted operating profit would fall 20 percent to 1.6 trillion yen ($14.24 billion), while net income is forecast to decline 18 percent to 1.5 trillion yen ($13.35 billion).

The two companies will also work together on electric vehicle and connected technologies and new safety systems among other things. There are plans to jointly develop electric vehicle tech 'for the basic structure of competitive electric vehicles'. But recent breakthroughs in batteries allow for longer travel per charge.

Toyota, Japan's biggest carmaker, has been forging alliances with smaller Japanese rivals for several years.

Toyoda also noted the growing competition from newcomers in the auto industry like Google, Apple and Amazon, stressing he was anxious about autos turning into commodities. "That's why I feel it has become increasingly important for us automakers to gather new partners without seeing things in confrontational perspectives". Net income advanced 11 percent to 613.06 billion yen ($5.46 billion), Senior Managing Officer Tetsuya Otake said Friday while announcing earnings results. Mazda has not made cars in the US since a joint partnership with Ford unraveled earlier this decade.

All Corollas now sold in the US are made in Ontario, Canada or Mississippi.

It's a cost-effective strategy that has worked well so far, but increasingly strict emissions regulations and the general trend of the auto industry toward some sort of electrification has left the EV-shaped hole Mazda's line-up looking more and more conspicuous.

Along with a boost in USA production capacity last year, Okada said this strategy would "help our numbers going forward", while cautioning that US selling incentives would increase this year as competition remains fierce.

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