AFP: Japanese auto giant Toyota and smaller rival Mazda said yesterday they agreed a capital tie-up to focus on joint development of electric vehicles, while building a US$1.6 billion factory in the United States which will create up to 4,000 jobs.
The move comes as the automotive industry is faced with a major shift towards greener transport and greater use of information technology.
“Now we face a battle with new rivals mainly in emerging markets and also a battle with IT companies such as Apple and Google,” Toyota president Akio Toyoda said at a press conference.
“I think an unprecedented battle without a map has begun,” he said.
Japanese carmakers are also facing uncertainty over US President Donald Trump’s drive to support domestic firms over foreign imports.
He has strongly criticised Toyota over its ongoing project to build a new factory in Mexico, threatening it with tariffs. Hiroshima-based Mazda has no plants in the US.
But Trump welcomed the announcement of the new US factory on Twitter.
“A great investment in American manufacturing!,” he tweeted.
In 2015, Toyota and Mazda signed a memorandum of understanding to explore collaboration.
Toyota and Mazda said yesterday that they would combine forces on key next-generation technology.
The pair will invest US$1.6 billion to build a factory in the US to produce cross-over models and Toyota’s Corolla sedan starting from 2021.
The US plant will have the capacity to produce approximately 300,000 vehicles a year and create up to 4,000 jobs.
As they enhance collaboration, Toyota will take a roughly five percent stake in Mazda, which in turn would invest in Toyota.
Toyota has sold more than 10 million hybrid gasoline-electric vehicles globally, including the Prius, since 1997.
But it is struggling to develop electric vehicles as several countries announce plans to clamp down on petrol and diesel cars.
France and Britain have both said they will end sales of petrol and diesel vehicles by 2040.
Also yesterday, Toyota -- which lost its crown as the world’s top-selling automaker in 2016 to German giant Volkswagen -- said its latest quarterly net profit jumped 11 percent to US$5.6 billion with vehicle sales up in Japan and the US, while it also lifted its annual earnings forecast.