NEWS: Toyota and Mazda deepen partnership with stock stakes, US factory

Toyota and Mazda announced late Friday in Japan that they would strengthen their partnership with a formal capital alliance. In 2015, the industrial giant from Aichi and the small carmaker from Hiroshima agreed to work together, but it was little more than a handshake. What was called “an engagement” then by Toyota’s CEO Akio Toyoda has now become a marriage, consummated with an actual exchange of stock shares. 

As part of the deal, Toyota will take ownership of 5 percent of Mazda stock. Mazda, being much smaller, will take just 0.25 percent of Toyota’s. In addition, the two will build a jointly owned plant in the United States.

The location of the factory hasn’t been determined yet, but a US manufacturing base will be a great help to Mazda. Currently, the all of the company’s US-sold products are built in Japan, and a strong yen has been heavily eating into its profits. Toyota and Mazda estimate that the plant will go on-line in 2021.

Beyond the factory, everything else we said in our analysis back in 2015 still holds true. Mazda will benefit from Toyota’s research into alternative power such as hybrids, hydrogen and electric vehicles.

Currently, Mazda sells none of those types of cars in the US (a hybrid Mazda 3 with Prius tech is sold in Japan), instead swearing that humankind has not squeezed every efficiency it can out of internal combustion engines yet. Admittedly, the SkyActive engines post notable numbers (returning 37 highway mpg in the Mazda 3) and what we hear about the next generation is even more impressive, but since the partnership was announced two years ago several countries have made plans to flat-out ban internal combustion engines in the coming decades.

It’s less clear what Toyota wants, but if we had to guess, we’d say it’s an understanding of how tiny little Mazda — whose global annual sales last year of 1.586 million paled in comparison to Toyota’s 10.18 million — can consistently build cars universally hailed as beautiful, efficient, and fun to drive. There is a culture of passion at Mazda that Toyota lost around the time the Supra was axed.

We know it’s ominous whenever a large company gets its claws on a beloved smaller one, but we think this will be good for both firms. In this age of consolidation, Mazda would not have survived on its own for much longer, and it’s better to be allied with a company who is not seeking to force budget cuts and platform sharing down Hiroshima’s throat. It’s a friendlier merger than what happened with Nissan and Mitsubishi, and Mazda lives to Miata another day.

The full press conference with English translation can be seen below.

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31 Responses to NEWS: Toyota and Mazda deepen partnership with stock stakes, US factory

  1. Voytko240 said:

    I know of a plant that used to be owned by another small Japanese car manufacturer that would be ideal.

  2. Punto8 said:

    Toyota is just sizing up Mazda to take it over. Toyota has no real need for SkyActiv technology or any Zoom Zoom. They have that much better engine and car design than Mazda ever had. Toyota is just expanding it’s horizons the same way they have a big stake in Subaru. When was the last time you saw a 626 or Protege from the 90’s putting around? Exactly….

    • Dave said:

      better car design than mazda? lol. check out resale values and collectability and you will see which is the better car.

      Toyota has been described by motoring journalists as “Automotive whitewoods” which they are. bland styling.

      • Punto8 said:

        You are nuts Dave! The RC Coupe is quite possibly the cleanest design out right now. Most Toyotas and Lexus are easier on the eyes than any Mazda & car sales prove it. I have no idea what resale source you are referencing but most serious car people know that Toyota/Lexus resale is and always has been rock solid. I don’t quote “motoring journalists” anymore because those are the same champs that deem Hyundai/Kia as reputable automakers 😉

    • Negishi no Keibajo said:

      I think you’re using Wall Street logic to a Zaibatsu world. Japanese entities are much more at home with collaborating instead of cutting each other’s heads off. In another analogy,; at the end of the day, Wall Street strokes egos as opposed to simply making a competitive product and money. Japan is by no means perfect, but their corporate culture is a 180 degrees from the U.S.

  3. CobaltFire said:

    I’m happy enough with the cooperation, as it got the Mazda2 here for this gen. I would have preferred a hatchback, but the sedan really drives like the classics that this site is all about. 2400lbs wet, a 6-speed, ~95WHP, and 185 section width tires.

    If you like the simpler, older cars (given that’s what the site is about I figure most of us do) go test drive one if you are in the market. Manuals can be hard to come by (there were less than 10 available in ALL of socal when I bought mine, vs over 1000 autos), but they perform FAR better than the auto’s (~8WHP, and about 40lbs less on the front axle from what I’ve seen).

  4. Joe Hornberger said:

    Toyota better NOT ruin Mazda. That’s what GM did to Isuzu, plus Ford screwed with Mazda pretty good for a while; at least in the U.S.

  5. Andrew said:

    I hope Toyota don’t stuff up Mazda, it worries me when bigger companies dig their claws into smaller ones. I feel Toyota has everything to gain from this and apart from money/hybrid tech, nothing to offer Mazda. Mazda does well for a smaller company and has some of the most loyal fans for a reason.

  6. Dave said:

    Some of you are saying you are worried that toyota may ruin mazda,. This is a possibility as toyota has no idea how to style cars, never has, and never will.

    As nostalgic fans do we really care though? theres been nothing really desirable or collectable after 1980 in my opinion, so I’m not too concerned.

    Toyota has no iconic cars or even collectable cars, some might say ,the 2000 gt, but its only collectable because it was in a james bond movie, no other reason. the mazda cosmo kills it in every aspect.

    • Punto8 said:

      Lol…hey everyone!!!! Dave doesn’t classify the AE86, early Celicas or the last Supra as iconic!!!! To each their own I guess but come on!!!!!

      • Dave said:

        Early celicas are nice, but they dont have the following rotary mazdas do. Toyotas come up for sale on auction sites and dont recieve anywhere near the demand the mazdas do.

        Toyotas dont have the racing history that mazdas do either. I dont recal corollas or coronas winning the 12 hour, lemans or coming 5th at Bathurst, do you?

        • Punto8 said:

          Corollas have won at Bathurst http://www.performancegarage.com.au/blog/bathurst-ae86-race-car
          Toyotas have been competitive in LeMans
          Let’s not even go into their contributions in Rally, Drift and 1/4 mile racing. I am a huge fan of Mazda Rotaries….but Mazda no longer makes Rotaries or RX-any things. Their Halo car, the Miata, missed the mark in sales and consumer interest with last redesign. Face it…you brand builds cars that are even more boring than the most plain Toyota. Mazda2, Mazda3 and those god-aweful car-based crossovers….absolutely nothing to worth mentioning and not a shred of pedigree….with exception of the Miata.

          • CobaltFire said:

            I’m not sure why you are so invested in a brand who could care less about you, but if I remember correctly Toyota’s subcompact sales are over 65% Mazda2 rather than Yaris THIS YEAR.

            The main reason Mazda’s aren’t selling as well in the US (In Australia they outsell Toyota across the board on small cars, as a note) is a combination of image and captive financing. It has very little to do with the cars themselves.

            Just to reiterate: when a Mazda is sold as a Toyota, at a Toyota dealership, with Toyota financing, in the US, it outsells the equivalent Toyota by over 50%.

          • Punto8 said:

            CobaltFire is looking at Yaris sales. A car that has a 17 year old engine design that still gets 30+ miles per gallon on a third gen redesign of the virtually same original platform. I say that was a good run for a subcompact. How many gens did the awesome and lauded Cobalt last….1 lol GM Cares nothing about you either Chap!

          • CobaltFire said:

            You picked one of multiple points I made (I’m well aware of the quality of the Toyota platform in question; I’ve owned a couple of that particular car), dodged the rest, and then brought in a company noone has even mentioned to try and derail/control the conversation. Further, you are outright jumping on anyone who says anything not completely in praise of Toyota.

            Go back under the bridge that spawned you, vile troll!

  7. Clay said:

    I guess the Auto Alliance factory that Mazda had in Flat Rock MI is a thing of the past.

  8. “You got Miata in my Corolla!”
    “You got Corolla in my Miata!”
    “Together they taste great”

    Maybe we can have a RWD Corolla again? I know it’s wishful thinking.

    • CobaltFire said:

      I’d take a Miata based Corolla in a HEARTBEAT.

      Anything to do with a Corolla getting into a Miata is a travesty.

    • Matt D said:

      Maybe they’ll finally admit the new “86” is really a Celica reboot when this happens. Then we can have a multi-trim level Corolla based on a Miata power plant and suspension that comes in a sedan, coupe, and hatch. THAT would be a true Corolla successor.

  9. Punto8 said:

    The last great Mazda was the RX7….nuff said

    • Dave said:

      What about the rx8 being awarded car of the year numerous times? Where was toyotas radical 4 door rotary coupe that even after ten years still looks like it was produced today?

      Toyota buyers are cardigan wearers who choose bland people movers like camrys and toragos. Toyota buyers do not look for excitement in cars.

      • Punto8 said:

        The RX-8 is a dud that sells for three grand or less locally. How many FDs have you seen for that cheap? Exactly. The Renesis 13B is scorned and avoided like the plague by true Rotary aficionados and the RX-8 styling is dog ugly. The four door coupe thing was a hit with the Saturns not a true sports car 😉 I admire your brand loyalty though. Any brand that was in bed with Ford that long was bound to get fleas lol. Toyota will correct that with a superior parts bin and rock solid engineering guidance….ask Subaru 😉

      • Matt D said:

        I prefer my cars to last more than about 40,000 miles before the engine starts eating all of its own lubricant.

  10. Punto8 said:

    The best thing that would come from this “partnership” would be to get a rotory in a Toyota from the factory. Prob not but that would be great!

  11. Negishi no Keibajo said:

    Maybe they’ll get a “deal” on the Faraday Plant site. I won’t get into politics but I’m sure the people of Nevada would love to recoup their money somehow. Even if it’s cents on the dollar.

    I’m happy to see they are going to collaborate on an electric platform. As a layman on the street, I look at Tesla and I think; as an average Joe, I don’t have the income to gamble with Tesla’s “drama”. A more reasonably priced and fun electric with a robust & mature support structure would get me into a showroom. I not keen on buying a car from an “innovator” that is launching rockets, digging tunnels, building residential powerpacks, solar roof tiles, and oh yeah, cars. I want a car that will get me to work and have a little fun on the way.

    • Randy said:

      Well, they probably should NOT build in California – it’s either going to break off or secede, which would make importing them another cost… (Just kidding! Chillax, yo!) 🙂

      If they hook up the SkyActive tech to a hybrid system, that could push up the mpg, and maybe Toyota would get improvements in handling. I COULD be wrong, but I’ve always viewed Mazda as the sportier company, just based on the handling; the engines always seemed rather comparable. Mazda could benefit from more R&D money.

      I know I DON’T want more collaborations on overall designs – they each have their own styling, and I like things to be more individual. The 86 and BRZ should have had more differentiation…

      I hope you’re right about the business culture being 180′ off ours. I’d hate to see happen there what seems to be happening with FCA… I guess we’ll see if the “culture” thing holds up as we watch what happens with the Nissan/Renault-Mitsubishi deal.

    • Randy said:

      I forgot to throw in – Subaru is into heavy equipment, etc., I know I saw Toyota doing Real Estate, and – I think – heavy equipment, and Mitsubishi does electronics, and even FOOD, so I don’t know if I’d worry too much about the companies’ other ventures, *BUT*, I’ll certainly give you the concerns about a NEW(-ish) company (Tesla) getting into all that…

      • Negishi no Keibajo said:

        Yeah, the whole FCA Nissan/Mitsubishi/Renault/ Dodge/Chrysler/Jeep thing makes me cringe. I’m not fond of Nissan’s entire line entry level cars or it’s approach to labor.

        I don’t have an issue with vertical integration or diversification but these Japanese companies evolved over time into their present form with a purpose. Elon Musk went from College nightclub operator to Physics major to software proprietor to internet publisher to financial services to PayPal to Tesla investor to running Tesla. All revolving around him. I also question his approach to labor. Remember the Lotus based roadster? When did they quit those? (They might have been before he joined Tesla)

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