Economy

Toyota, Mazda to build $1.6B, 4000-job United States automotive assembly plant

Toyota, Mazda to build $1.6B, 4000-job United States automotive assembly plant

Corolla production in the U.S. should also take some of the sting off the potential import tax for Toyota, too, as it's one of the brand's bestsellers across the pond, alongside the RAV4 and Camry.

Under its new plan, Toyota's forthcoming factory in Guanajuato, Mexico will not build Corollas that are now assembled in Canada and instead build the medium-sized Tacoma pickup.

The new alliance will no doubt come as a piece of good news for the Trump administration which has promised increased auto manufacturing inside America.

The two carmakers have also agreed to join forces to develop electric auto technology, and Toyota is to take a 5% stake in Mazda. As part of the agreement, Toyota and Mazda will also work together to develop in-car information technologies and automated driving functions.

After reassessing the market, Toyota has changed its plan to make Corollas at a plant in Guanajuato, Mexico, now under construction, and instead will produce Tacoma pickups there, Toyota President Akio Toyoda said.

The plan for the two companies to share a USA production facility is a relatively novel one, but Lentz said the arrangement is grounded in mutual respect and past cooperation.

In his Friday-morning tweets, Trump also highlighted another foreign company's recent investment in the US. Until a year ago, Subaru Corp. built the Camry for Toyota at a factory in Indiana.

The electric vehicle market segment has become an increasingly competitive because of concerns about global warming and the environment. Mazda has not made cars in the US since a joint partnership with Ford unraveled earlier this decade. The decision to build the plant in the USA has been hailed as a boost for American manufacturing.

According to the Japanese newspaper, Toyota will purchase a five percent stake in Mazda.

For Toyota, the investment is a push to expand USA vehicle-making capacity and market share and intensify its attack on the Detroit automakers' lucrative truck business. He threatened vehicle companies with a "big border tax" if they chose to build cars in Mexico instead of the US.

But since January, Trump has praised Toyota for its USA investments.

Toyota began its manufacturing operations in the United States in 1972. With the aim of creating new types of value for future mobility, they will accelerate and enhance bilateral cooperation as long-term partners and contribute to the development of a sustainable society by exceeding customers' expectations.

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