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Toyota and Mazda to Build Vehicles in New U.S. Assembly Plant

What does the new alliance mean for Toyota’s 86 successor?

Toyota will build Corollas and Mazda will build a new crossover for the North American market, possibly the CX-4 unveiled at the Beijing show last year, at a new $1.6-billion U.S. assembly plant capable of building 300,000 vehicles per year. The plant is scheduled to open in 2021 and will employ about 4,000 workers.

The plant is part of a new "business and capital alliance" between the two automakers in which Toyota is purchasing a 5.5-percent share of Mazda, and Mazda is purchasing a 0.25-percent share of Toyota. The two also will develop a battery-electric vehicle together.

Additionally, Toyota will help Mazda develop autonomous and connected vehicle technologies, while hoping that some good old fashioned Zoom Zoom will rub off on its very reliable, but often dull cars and trucks.

"The greatest fruit of our partnership with Mazda is that we have found a new partner who truly loves cars," Toyota president Akio Toyoda said in a prepared statement from Tokyo. "It has also sparked Toyota's competitive spirit, increasing our sense of not wanting to be bested by Mazda. This is a partnership in which those who are passionate about cars will work together to make even better cars. It is also the realization of our desire to never let cars become commodities."

Although the new factory has just been announced, and won't open for three to four years, competition among U.S. states to land the plant has no doubt already begun. Toyota will continue to assemble its Corolla compact sedan in Blue Springs, Mississippi and the automaker will want to take advantage of the supply chain built up around that location.

Toyota also plans to shift some Tacoma pickup production to its Guanajuato, Mexico plant opening in 2019. Toyota originally planned to move Corolla production to Guanajuato, thus freeing up Blue Springs for Tacoma production. The truck is also assembled in Texas and is ramping up production now in Baja, California, Mexico.

President Trump tweeted news of the plant Friday morning, adding "A great investment in American manufacturing!"

Last year, Toyota sold 378,210 Corollas in the U.S. , while Mazda sold 112,235 CX-5s, its bestselling model. If increasing popularity in sport/utilities extends to 2021, the new Mazda crossover could account for up to half of the new plant's 300,000-unit per year production, with Toyota shifting Corolla capacity between that plant and Blue Springs, as needed.

The next Corolla will be built on the Toyota New Global Architecture (TNGA) that underpins the 2018 Camry. The Mazda CUV could go to TNGA, though Mazda is known for its ability to build a number of disparate models in one factory complex. Mazda's Hiroshima assembly plant has long turned out front-wheel-drive sedans and sport/utilities alongside the MX-5 Miata and until recently, the RX-8. Until Ford Motor Company sold two-thirds of its controlling interest in Mazda in 2008, the two built the RWD Mustang and FWD Mazda6 in Flat Rock, Michigan.

The Mazda CX-4 unveiled at the 2016 Beijing Motor Show is a CX-5-based crossover with a lower, fastback roofline. Though speculatively a potential product for the new U.S. factory, its bodystyle is similar to niche models like the BMW X4 and Mercedes-Benz GLC Coupe.

While Ford sale of its stake has freed up Mazda in terms of product development and corporate governance, like other small automakers, it has struggled for resources since the global recession of the last decade. Its deal with Toyota includes exploring "joint development of technologies for the basic structure of competitive electric vehicles, mobilizing and exchanging expertise freely and actively." Even Toyota has lagged in EV development as it has concentrated on its Prius line of hybrids, and on hydrogen fuel cell development.

The two will jointly develop onboard multimedia systems and in-car information technologies, and Mazda will cooperate "in Toyota's vehicle-to-vehicle and vehicle-to-infrastructure technologies with the ultimate goal of creating a mobile society devoid of accidents."

Mazda already builds the Yaris iA for Toyota, based off its latest Mazda2/Demio, in its Salamanca, Mexico factory. Toyota will build a "two-box" commercial van for Mazda for the Japanese domestic market.

The next question is how Toyota and Mazda will leverage this alliance for sports car production. Toyota purchased about 10 percent of Fuji Heavy Industries/Subaru after General Motors sold its 20-percent stake in Subaru in 2005.

An alliance between Toyota and Subaru has produced the Toyota 86 and Subaru BRZ, though plans to base the upcoming 2018 Subaru Ascent off the Toyota Highlander were scrapped. Instead, the new three-row Subaru SUV will be built off a new platform developed by the smaller automaker and will use its signature horizontally opposed engines.

Shortly after Chrysler's 2009 bankruptcy, FiatChrysler and Mazda signed a deal to build a new Fiat 124 Spyder (originally, an Alfa Romeo was intended) off the fourth-generation Mazda MX-5 Miata, a car that probably would not have been developed without the joint-venture.

A second-generation Toyota 86/Subaru BRZ apparently has not been approved for production. Toyota may consider how Fiat was able to better differentiate the 124 Spider from the Miata. While the 86 and BRZ share much of their sheetmetal and the Subaru's pancake four, the 124 Spider is built in Mazda's Hiroshima plant, though with its own distinct sheetmetal and with Fiat engines shipped from Italy.