Mazda and Toyota Form Alliance

Mazda Toyota Form Alliance
By Isaac E

The first part of the agreement establishes a joint venture that produces vehicles in the United States. Both companies commit to developing technologies for electric vehicles jointly. They also will jointly develop connected-car technology, collaborate on advanced safety technology, and expand complementary products. The news comes on the heels of Tesla’s Model 3 presentation last month. The Model 3 is the first mass market electric car.

Toyota’s Position

Toyota President Akio Toyoda said: “The greatest fruit of our partnership with Mazda is that we have found a new partner who truly loves cars. It has also sparked Toyota’s competitive spirit, increasing our sense of not wanting to be bested by Mazda.” Toyoda wanted to make clear that this is not a merger. The agreement is two businesses working together with one goal. Their combined vision is to surpass their American competition old and new. Toyoda continued by stating, “a partnership in which those who are passionate about cars will work together to make ever-better cars. It is also the realization of our desire to never let cars become commodities.” Toyoda believes that the partnership is a necessary step against increased competition. Toyota wants their company to be a leader in innovation.

Mazda’a Position

Mazda President and CEO Masamichi Kogai said: “Nothing would please me more than if, through this alliance, we can help to energize the auto industry and create more car fans by bringing together two competitive spirits to spur each other on, leading to innovations and fostering talent and leaders.” Mazda and Toyota in the last thirty years went from an irrelevant player in American car sales to gain significant market share against Ford, Chrysler, and General Motors. According to a report released by Good Car Bad Car, Toyota finished a close third to Ford.

$1.6 Billion Manufacturing Plant

Toyota and Mazda plan to build a $1.6 billion manufacturing plant in the United States. The facility is expected to create up to 4,000 jobs. Toyota and Mazda intention is to improve competitiveness in manufacturing through this new production collaboration. Toyota will pay 50 billion yen the United States equivalent of $450 million for a 5% stake in Mazda. Mazda plans to buy a stake of the same value in Toyota.

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