Thursday, 19 October, 2017

Toyota To Partner With Mazda On Electric Vehicles

Reuters Reuters
Delores Daniels | 06 August, 2017, 01:39

Toyota and Mazda joining forces, announcing their plans Friday to build a $1.6 billion plant in the USA with a focus on developing electric vehicle technologies.

Toyota is also courting compact vehicle 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. Concerns about global warming and the environment have made electric vehicles an increasingly competitive market segment.

"I can't say how far it'll expand, because honestly I don't know". Specific details of the collaboration will be determined as the companies work together going forward. With the sense of crisis, Mazda chose to approach Toyota.

The two will take small stakes in each other as part of the tie-up: Toyota, the world´s second-largest automaker by vehicle sales past year, will take a 5 percent share of Mazda, extending its dominance in Japan´s auto sector. The value of the shares mutually acquired by both companies will be equivalent.

"In the future, there will be artificial intelligence, autonomous driving and various environmentally friendly vehicles that we have to prepare for, and new competitors from emerging markets and IT companies like Apple and Google", Toyoda said.

"What's different from the past is that there are no nautical charts for us to follow".

Toyota said it changed its plan to make Corollas at a plant in Guanajuato, Mexico, now under construction, after reassessing the market. He called it "a great investment in American manufacturing" in a Friday morning tweet.

Trump welcomed the announcement in a tweet: "Toyota & Mazda to build a new $1.6B plant here in the United States of America and create 4K new American jobs".

Toyota's U.S. Corolla sales are down almost 9 percent this year.

Taken together, the plans are likely to be trumpeted as a victory for President Trump's push to manufacture more locally sold vehicles in the U.S. He had threatened Toyota and other auto companies for selling cars to American customers that were built elsewhere.

"We have a lot of confidence in the USA economy", Lentz said.

Purchasing stakes in other companies is not an every day phenomenon at Toyota, which in recent years acquired a minority equity stake in Isuzu Motors Ltd.

This means, starting from the beginning of October, Toyota will own 5.05 per cent of Mazda's common stock, while Mazda will have a 0.25 per cent stake in Toyota.

The plant, which is planned to start operating in 2021, will be capable of producing 300,000 vehicles a year, with production divided between the two automakers, and employ about 4,000 people, according to a company filing.

Toyota has already invested $23.4 billion in its US operations, and has planned another $11.6 billion in investment over the next five years, fueled by robust profits.

Also Friday, Toyota reported its April-June profit was 613.0 billion yen ($5.6 billion), up 11 percent from 552.4 billion yen a year earlier. "It is also the realization of our desire to never let cars become commodities".

The companies also plan to work together on various advanced auto technology, such as electric vehicles, safety features and connected cars, as well as products that they could supply each other, they said.

The automaker has yet to realize the full benefits of a revamped manufacturing process, based on using common components that it calls the TNGA for short. These activities will allow the company to more quickly respond to its customers' needs depending on the region and model.

Toyota is undergoing a full-fledged shift to TNGA, which is adding to the forecast in capital expenditure, Otake said.

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