Published: Sat, August 05, 2017
Money | By Oscar Reynolds

Donald Trump says Toyota and Mazda's U.S. investment 'great for American manufacturing'

Donald Trump says Toyota and Mazda's U.S. investment 'great for American manufacturing'

Japanese automakers Toyota Motor Corp. and Mazda Motor Corp. plan to spend $1.6 billion to jointly build auto manufacturing plant in the US - a move that will create up to 4,000 jobs, both sides said Friday.

The Japanese automakers, which have not announced exactly where the new factory would be built, would reportedly share the new facility equally.

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

This development would be a boost to U.S. president Donald Trump, who has chastised automakers setting up shop in neighbouring countries.

Toyota has invested $961 million in the Blue Springs plant, which employs 2,000 workers.

Looking ahead, for fiscal year ending March 31, 2018, Toyota now forecasts consolidated net revenue of 28.5 trillion yen, operating income of 1.85 trillion yen, and net income of 1.75 trillion yen. But their close relationship has been in development for many years, he said. Corolla production also is done at a plant in Canada. "In the past we focused on selling cars based on their performance, but for years we've been promoting our cars as something which will make our customers' lives more fulfilling", CFO Toshiaki Okada told reporters at a results briefing.

"This is a partnership in which those who are passionate about cars will work together to make ever-better cars", he said.

The Japanese auto giants agreed to establish a £1.6bn joint venture plant in the U.S. with equal funding contributions, with the goal of beginning operations in 2021 and eventually producing 300,000 vehicles a year.

Toyota's profit slowdown is exacerbated partly by spiraling outlays for such things as higher incentives and ramped up investments in r&d and manufacturing sites.

"We're in the process of preparing for our current volumes to be projected, and at this moment, we don't see any big change for us".

The new factory will cost $1.6 billion and its location is still undecided. Toyota is racing to keep up with shifts in technology and consumer tastes.

A new Mazda SUV crossover will also be made at the new U.S. factory, with the two companies hoping production will begin in 2021.

The team-up has led to a flurry of announcements on the partnership's goal, including joint EV tech development, a new factory in the United States and a whole host of juicy product details. But at Toyota Motor Sales U.S.A., which covers sales of both the Toyota and Lexus brands, cars accounted for 44 percent of the mix. That came together with today's announcement.

Toyota, in a statement, said the two companies have been exploring various areas of collaboration under a May 2015 agreement.

"Blue Springs is a proven commodity and has shown it's fully capable of building the top-selling vehicle in the world", he said. General Motors last won the title in 2011. Meanwhile, Mazda will acquire Toyota shares equivalent of a 0.25 percent stake.

When revealing the 2018 Toyota Camry at the Detroit auto show, Toyota touted several graphics on the screen behind the new, shiny cars.

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