Toyota, Mazda unveil capital tie-up plans

Georgetown Kentucky Toyota Plant

The plant, which will open in 2021, will have the capacity to assemble 300,000 vehicles, according to Reuters Friday.

The President had also said Toyota would face hefty tariffs for cars built in Mexico if it exported them to the US.

In a tweet early Friday morning, Trump praised Toyota and Mazda for investing $1.6 billion in a new US assembly plant.

Yesterday, Nikkei reported that Toyota would take around 5% stake in Mazda to develop key electric vehicle technologies and jointly build a factory in the US. Toyota also said it's going to increase its investment in "crucial fields" related to the future of automotive technology, including self-driving, artificial intelligence and green vehicle tech. Toyota claims that the U-turn on where to produce the Corolla will have "no substantial impact on Toyota's investment and employment there" as the brand plans to produce the Tacoma pickup there instead.

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Taken together, the plans are likely to be trumpeted as a victory for Trump's push to manufacture more locally sold vehicles in the US, even if it had no impact on the decision.

According to the agreement, Toyota will acquire a 5.05 percent stake in Mazda for 50 billion yen (454 million USA dollars), while Mazda is to buy a 0.25 percent shareholding in Toyota that are equivalent in value to the Mazda shares. Until previous year, Subaru Corp. built the Camry for Toyota at a factory in Indiana.

Both parties would also be cooperating on electric vehicles. This is a partnership in which those who are passionate about cars will work together to make ever-better cars.

He campaigned on promises to increase manufacturing and expand employment for American vehicle workers.

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In the USA market, Toyota has been struggling to sell sedan-type cars as the sales of large vehicles are increasing because of low gasoline prices.

Both Japanese automakers will take small amount of stakes in each other as part of the link up.

Sales in China, the world's top auto market followed by the United States, was a bright spot for Mazda, rising 20 percent to 71,000 units, lifting the automaker's global sales by 1 percent.

For Toyota, the investment is a push to expand US vehicle-making capacity and market share and intensify its attack on the Detroit automakers' lucrative truck business. Toyota and Mazda will be 50-50 partners in the new agreement. Their alliance led world vehicles sales for the first time in the first half of this year.

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The Nikkei newspaper reported earlier the capital tie-up and plans for a USA auto plant, without saying where it got the information. The location of the United States plant has not been made public yet.

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