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TOKYO: Japanese automakers Toyota and Mazda said on Friday they plan to build a $1.6 billion (SR6 billion) US assembly plant and jointly develop electric vehicle technologies.
The plant, which is set 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, the companies said in regulatory filings.
The plan on electric vehicles comes as tightening global emissions regulations prompt more automakers to develop battery-powered cars. Toyota and Mazda will also work together to develop in-car information technologies and automated driving functions.
Toyota will take a 5 percent stake in its smaller rival as part of the new joint venture, while Mazda will take a 0.25 percent stake in Toyota.
The automakers plan to produce Toyota Corollas and a new Mazda SUV crossover at the new plant.
A new auto plant would be a major boost to US President Donald Trump, who campaigned on promises to increase manufacturing and expand employment for American autoworkers.
Global carmakers are facing massive costs to quickly develop new technologies in lower-emission cars and self-driving cars.
Toyota has been courting a number of Japanese automakers in the past few years, announcing in February that it and compact car maker Suzuki Motor Corp. planned to cooperate in R&D projects while Toyota would tap its smaller rival’s expertise in emerging Asian markets.
It also has a long-standing partnership with Subaru, under which the two automakers jointly developed a compact sports car model which is manufactured by Subaru.
Mazda, whose annual global vehicle sales are one-eighth that of Toyota, caters to a specific audience largely in North America with its design-conscious sedans and SUVs, and has been focusing on developing more fuel-efficient gasoline engines.
With a limited R&D budget of around ¥140 billion this year — a fraction of around ¥1 trillion at Toyota — Mazda has said that it lacks the funds to develop electric cars on its own, a view also shared by Subaru and Suzuki.
Toyota has set a goal for all of its vehicles to be zero emission by 2050. Last year it established a division to develop full-sized EVs, shifting gears after long favoring EVs only for short-distance commuting given their limited driving range and lengthy charging time.