Japanese automakers Toyota and Mazda said Friday they plan to spend $1.6 billion to set up a joint-venture auto manufacturing plant in the US—a move that will create up to 4,000 jobs. The plant will have an annual production capacity of about 300,000 vehicles and will produce Toyota Corollas for the North American market, reports the AP. Mazda will make crossover models there that it plans to introduce to that market. The companies will split the cost for the plant equally. Toyota says it changed its plan to make Corollas at a plant in Guanajuato, Mexico, now under construction, and instead will produce Tacoma pickups there. President Trump had criticized Toyota for taking auto production and jobs to Mexico.
With the investment, both automakers can hope to prove their good US corporate citizenship and appease Trump's jobs concerns. The companies will also work together on various advanced auto technology, such as electric vehicles, safety features, and connected cars, they say. The sheer cost of the plant makes a partnership logical, as it boosts cost-efficiency and economies of scale. Toyota will also acquire a 5.05% stake in Mazda, valued at $455 million, while Mazda will acquire the equivalent of a 0.25% stake. Toyota President Akio Toyoda praised Mazda, calling the new deal a "partnership in which those who are passionate about cars will work together to make ever-better cars." The investment deal is expected to be final by October, the companies say. (Read more Toyota stories.)