Toyota takes stake in Mazda, links up for $1.6 billion U.S. plant
TOKYO (Reuters) – Toyota Motor Corp said on Friday it planned to take a five percent share of smaller Japanese rival Mazda Motor Corp, as part of an alliance that will see the two build a $1.6 billion U.S. assembly plant and work together on electrical vehicles.
The plant was a surprise for investors at a time of cooling U.S. sales, but marked good news for U.S. President Donald Trump who came to office on the back of promises to bring back manufacturing and jobs for U.S. workers. He commented on Twitter that it was a «superb investment in American manufacturing».
The plant, whose location is not yet public, will be able to produce 300,000 vehicles a year, with production divided inbetween the two automakers, and employ about Four,000 people. It will begin operating in 2021.
Analysts said the plan was more than a political ploy. The alliance is also an attempt to catch up with rivals in the race for electrical car technology, as tighter global emissions rules loom, along with the entry of fresh players into the market.
«There will be fresh rivals appearing – Apple, Google – these are IT companies, we also need to challenge with them, too,» Toyota President Akio Toyoda, grandson of the company`s founder, told a news conference in Tokyo.
He was appointed last year to lead Toyota`s freshly formed electrified car division, flagging the group`s commitment to a technology it has been slow to embrace.
«What`s different from the past is that there are no nautical charts for us to go after. It`s without precedent,» he said of the shove into alternatives to the internal combustion engine.
Other traditional automakers such as Daimler and BMW are also weighing how best to work on fresh, disruptive technology, from electrified vehicles to autonomous driving, that require hefty investment and have turned firms like Google and Tesla into rivals.
Toyota has set a purpose for all of its vehicles to be zero emission by 2050. But until recently, it has said it favoured EVs for short-distance commuting, given their limited driving range and lengthy charging time.
It has been investing intensely in hydrogen fuel-cell vehicles (FCVs), while rivals such as Nissan Motor Co, Volkswagen AG and Tesla have touted unspoiled electrified cars as the most viable zero-emission vehicles.
As part of the agreement, as well as electrified car technology, Toyota and Mazda will work together to develop in-car information technologies and automated driving functions.
BULKING UP
Toyota, Japan`s thickest auto company, has been forging alliances with smaller rivals for several years, effectively engineering a liberate network at the heart of the Japanese auto sector. It already wields a 16.Five percent stake in sixth-ranked Subaru Corp with which it also has a development partnership.
Toyota is also courting compact car maker Suzuki Motor Corp to cooperate on R&D and parts supply, as Toyota seeks to tap its smaller rival`s expertise in emerging Asian markets.
As part of Friday`s plan, Toyota, the world`s second-largest automaker by vehicle sales last year, will take a five percent share of Mazda, and Mazda will take a 0.25 percent share of Toyota.
Mazda said it could even expand the alliance, as long as it could stay in control of its own management. «We will examine the possibility of expanding the capital alliance, but the basic premise is that autonomy is assured,» said Mazda Executive Vice President Akira Marumoto.
A stake in Mazda may also prevent future incursions by tech companies, one analyst 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 realises this,» CLSA managing director Chris Richter said.
«By buying a five percent 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, for its part, stands to build up from a deal that gives the puny automaker a production foothold in the United States. At the moment, it ships all vehicles sold in the country, its thickest market, from its plants in Japan and Mexico.
With an R&D budget of around one hundred forty billion yen ($1.27 billion) this year, a fraction of Toyota`s one trillion yen, Mazda lacks the funds to develop electrified cars on its own, a predicament bondage collective by Subaru and Suzuki.
«Mazda needs electrification technology. In the past, they`ve pooh-poohed EVs, they`ve felt they can make internal combustion engines more efficient, but the bottom line is that globally you need to have this technology,» said Janet Lewis, head of Asia transportation research at Macquarie Securities.
The automakers plan to produce Toyota Corollas and a fresh Mazda SUV crossover at the fresh plant, and the companies said they could eventually build other cars including electrical vehicles.
Toyota primarily had been planning to produce Corollas at its fresh $1 billion plant being built in Mexico, prompting Trump to menace punitive tariffs.
The company has since said it will instead produce its Tacoma truck model in Mexico.
Toyota takes stake in Mazda, links up for $1
Toyota takes stake in Mazda, links up for $1.6 billion U.S. plant
TOKYO (Reuters) – Toyota Motor Corp said on Friday it planned to take a five percent share of smaller Japanese rival Mazda Motor Corp, as part of an alliance that will see the two build a $1.6 billion U.S. assembly plant and work together on electrified vehicles.
The plant was a surprise for investors at a time of cooling U.S. sales, but marked good news for U.S. President Donald Trump who came to office on the back of promises to bring back manufacturing and jobs for U.S. workers. He commented on Twitter that it was a «excellent investment in American manufacturing».
The plant, whose location is not yet public, will be able to produce 300,000 vehicles a year, with production divided inbetween the two automakers, and employ about Four,000 people. It will embark operating in 2021.
Analysts said the plan was more than a political ploy. The alliance is also an attempt to catch up with rivals in the race for electrified car technology, as tighter global emissions rules loom, along with the entry of fresh players into the market.
«There will be fresh rivals appearing – Apple, Google – these are IT companies, we also need to contest with them, too,» Toyota President Akio Toyoda, grandson of the company`s founder, told a news conference in Tokyo.
He was appointed last year to lead Toyota`s freshly formed electrified car division, flagging the group`s commitment to a technology it has been slow to embrace.
«What`s different from the past is that there are no nautical charts for us to go after. It`s without precedent,» he said of the shove into alternatives to the internal combustion engine.
Other traditional automakers such as Daimler and BMW are also weighing how best to work on fresh, disruptive technology, from electrical vehicles to autonomous driving, that require hefty investment and have turned firms like Google and Tesla into rivals.
Toyota has set a objective for all of its vehicles to be zero emission by 2050. But until recently, it has said it favoured EVs for short-distance commuting, given their limited driving range and lengthy charging time.
It has been investing powerfully in hydrogen fuel-cell vehicles (FCVs), while rivals such as Nissan Motor Co, Volkswagen AG and Tesla have touted unspoiled electrified cars as the most viable zero-emission vehicles.
As part of the agreement, as well as electrified car technology, Toyota and Mazda will work together to develop in-car information technologies and automated driving functions.
BULKING UP
Toyota, Japan`s thickest auto company, has been forging alliances with smaller rivals for several years, effectively engineering a liberate network at the heart of the Japanese auto sector. It already possesses a 16.Five percent stake in sixth-ranked Subaru Corp with which it also has a development partnership.
Toyota is also courting compact car maker Suzuki Motor Corp to cooperate on R&D and parts supply, as Toyota seeks to tap its smaller rival`s expertise in emerging Asian markets.
As part of Friday`s plan, Toyota, the world`s second-largest automaker by vehicle sales last year, will take a five percent share of Mazda, and Mazda will take a 0.25 percent share of Toyota.
Mazda said it could even expand the alliance, as long as it could stay in control of its own management. «We will explore the possibility of expanding the capital alliance, but the basic premise is that autonomy is assured,» said Mazda Executive Vice President Akira Marumoto.
A stake in Mazda may also prevent future incursions by tech companies, one analyst 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 realises this,» CLSA managing director Chris Richter said.
«By buying a five percent 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, for its part, stands to build up from a deal that gives the petite automaker a production foothold in the United States. At the moment, it ships all vehicles sold in the country, its thickest market, from its plants in Japan and Mexico.
With an R&D budget of around one hundred forty billion yen ($1.27 billion) this year, a fraction of Toyota`s one trillion yen, Mazda lacks the funds to develop electrified cars on its own, a predicament bondage collective by Subaru and Suzuki.
«Mazda needs electrification technology. In the past, they`ve pooh-poohed EVs, they`ve felt they can make internal combustion engines more efficient, but the bottom line is that globally you need to have this technology,» said Janet Lewis, head of Asia transportation research at Macquarie Securities.
The automakers plan to produce Toyota Corollas and a fresh Mazda SUV crossover at the fresh plant, and the companies said they could eventually build other cars including electrified vehicles.
Toyota originally had been planning to produce Corollas at its fresh $1 billion plant being built in Mexico, prompting Trump to menace punitive tariffs.
The company has since said it will instead produce its Tacoma truck model in Mexico.
Toyota takes stake in Mazda, links up for $1
Toyota takes stake in Mazda, links up for $1.6 billion U.S. plant
TOKYO (Reuters) – Toyota Motor Corp said on Friday it planned to take a five percent share of smaller Japanese rival Mazda Motor Corp, as part of an alliance that will see the two build a $1.6 billion U.S. assembly plant and work together on electrical vehicles.
The plant was a surprise for investors at a time of cooling U.S. sales, but marked good news for U.S. President Donald Trump who came to office on the back of promises to bring back manufacturing and jobs for U.S. workers. He commented on Twitter that it was a «fine investment in American manufacturing».
The plant, whose location is not yet public, will be able to produce 300,000 vehicles a year, with production divided inbetween the two automakers, and employ about Four,000 people. It will embark operating in 2021.
Analysts said the plan was more than a political ploy. The alliance is also an attempt to catch up with rivals in the race for electrical car technology, as tighter global emissions rules loom, along with the entry of fresh players into the market.
«There will be fresh rivals appearing – Apple, Google – these are IT companies, we also need to rival with them, too,» Toyota President Akio Toyoda, grandson of the company`s founder, told a news conference in Tokyo.
He was appointed last year to lead Toyota`s freshly formed electrified car division, flagging the group`s commitment to a technology it has been slow to embrace.
«What`s different from the past is that there are no nautical charts for us to go after. It`s without precedent,» he said of the thrust into alternatives to the internal combustion engine.
Other traditional automakers such as Daimler and BMW are also weighing how best to work on fresh, disruptive technology, from electrical vehicles to autonomous driving, that require hefty investment and have turned firms like Google and Tesla into rivals.
Toyota has set a objective for all of its vehicles to be zero emission by 2050. But until recently, it has said it favoured EVs for short-distance commuting, given their limited driving range and lengthy charging time.
It has been investing powerfully in hydrogen fuel-cell vehicles (FCVs), while rivals such as Nissan Motor Co, Volkswagen AG and Tesla have touted unspoiled electrified cars as the most viable zero-emission vehicles.
As part of the agreement, as well as electrified car technology, Toyota and Mazda will work together to develop in-car information technologies and automated driving functions.
BULKING UP
Toyota, Japan`s fattest auto company, has been forging alliances with smaller rivals for several years, effectively engineering a liberate network at the heart of the Japanese auto sector. It already wields a 16.Five percent stake in sixth-ranked Subaru Corp with which it also has a development partnership.
Toyota is also courting compact car maker Suzuki Motor Corp to cooperate on R&D and parts supply, as Toyota seeks to tap its smaller rival`s expertise in emerging Asian markets.
As part of Friday`s plan, Toyota, the world`s second-largest automaker by vehicle sales last year, will take a five percent share of Mazda, and Mazda will take a 0.25 percent share of Toyota.
Mazda said it could even expand the alliance, as long as it could stay in control of its own management. «We will examine the possibility of expanding the capital alliance, but the basic premise is that autonomy is assured,» said Mazda Executive Vice President Akira Marumoto.
A stake in Mazda may also prevent future incursions by tech companies, one analyst 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 realises this,» CLSA managing director Chris Richter said.
«By buying a five percent 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, for its part, stands to build up from a deal that gives the petite automaker a production foothold in the United States. At the moment, it ships all vehicles sold in the country, its thickest market, from its plants in Japan and Mexico.
With an R&D budget of around one hundred forty billion yen ($1.27 billion) this year, a fraction of Toyota`s one trillion yen, Mazda lacks the funds to develop electrical cars on its own, a predicament bondage collective by Subaru and Suzuki.
«Mazda needs electrification technology. In the past, they`ve pooh-poohed EVs, they`ve felt they can make internal combustion engines more efficient, but the bottom line is that globally you need to have this technology,» said Janet Lewis, head of Asia transportation research at Macquarie Securities.
The automakers plan to produce Toyota Corollas and a fresh Mazda SUV crossover at the fresh plant, and the companies said they could eventually build other cars including electrical vehicles.
Toyota primarily had been planning to produce Corollas at its fresh $1 billion plant being built in Mexico, prompting Trump to menace punitive tariffs.
The company has since said it will instead produce its Tacoma truck model in Mexico.