Mazda and Toyota Establish JV to build Vehicles in Alabama on Mazda Toyota Manufacturing

Toyota trying to bolster an ailing Mazda ?

Mazda Motor Corporation and Toyota Motor Corporation have established their new joint-venture company “Mazda Toyota Manufacturing, U.S.A., Inc.” (MTMUS) that will produce vehicles in Huntsville, Alabama starting in 2021.

First announced in August of 2017 (Toyota and Mazda JV to Build Cars in U.S. Trumped?), a new plant will make 150,000 Mazda crossover model that will be newly introduced to the North American market and 150,000 Toyota Corolla compacts.

About 4,000 jobs will be created from the $1.6 billion project with equal funding from both Japanese corporations, along with taxpayer money and government assistance coming from the state of Alabama and the city of Huntsville. MTMUS will soon begin land preparation for the new plant, and the full-scale construction of the plant is expected to start in 2019. (Trump on Track for Largest Deficits in U.S. History.)

Japanese Goliath Toyota * – the new plant will be Toyota’s 11th manufacturing facility in the U.S  – and tiny Mazda #, which no longer builds here after the Ford Motor divorce,  claimed this is of mutual benefit by using the resources of both companies and complementing each other’s products and technologies toward the goal of making more-appealing cars. (Mazda CX-5 Crossover Takes on Subaru Forester, Next Mazda B-Series Pickup to be Built by Isuzu, Mazda Drops Ford Motor in New Changan Mazda JV in China)

In AutoInformed’s view this appears to be Toyota’s attempt to prop up an ailing Mazda along with the politically convenient claim about creating jobs under nit-twit Trump who wants to bring jobs back to the U.S. If these are new jobs, how are they being brought back?

“We hope to make MTMUS a plant that will hold a special place in the heart of the local community for many, many years,” said Mazda’s Executive Officer Masashi Aihara, who will serve as President of MTMUS.

Mazda and Toyota Deal

  • establish a joint venture that produces vehicles in the United States,
  • jointly develop technologies for electric vehicles,
  • jointly develop connected-car technology,
  • collaborate on advanced safety technologies and
  • expand complementary products.

Toyota will acquire 31,928,500 shares of common stock newly issued by Mazda through a third-party allotment (shareholding ratio of 5.05% on an issued share basis after the capital increase; total value of 50 billion yen).

Mazda will, by selling treasury stock through a third-party allotment to be implemented by Toyota, acquire Toyota shares that are equivalent in value to the Mazda shares (shareholding ratio of 0.25% on an issued share basis). The value of the shares mutually acquired by both companies will be equivalent.

Profits or Lack Thereof

* Toyota predicts a record annual net profit of ~2.4 trillion yen ($22 billion) for the fiscal year to March 2018, up from its November 2017 forecast of 1.95 trillion yen because of a weaker Yen and Trump’s tax cuts.

# Mazda forecasts a full-year operating profit fall of -43% to 130 billion yen ($1.11 billion) compared to a year earlier.

About Kenneth Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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