Toyota and Mazda To Build U.S. Plant -- WSJ

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 4, 2017).

Toyota Motor Corp. and Mazda Motor Corp. are expected to announce Friday plans to build a $1.6 billion assembly plant in the U.S. that would create 4,000 jobs and be up and running by 2021, according to a person briefed on the plans.

The new factory's location hasn't been decided. Once built, it would produce 300,000 vehicles a year with half being the Toyota Corolla and the rest an unspecified Mazda model, the person said.

The two Japanese car makers also will form a joint venture to co-develop electric vehicles, safety features and connected-car technologies, the person said.

Mazda had previously operated with Ford Motor Co. in a joint venture in the U.S. Toyota has worked with Subaru and others.

The Nikkei earlier reported news of the expected factory announcement.

The announcement could hand a victory to President Donald Trump, who took aim at Toyota earlier this year for its plans to build a $1 billion assembly plant in Mexico, rather than in the U.S.

Toyota, in a statement, said the auto maker's board is considering the joint-venture proposal and pointed to an agreement in May 2015 between Toyota and Mazda to "explore various areas of collaboration."

Mazda's board will also review the proposal at a meeting Friday in Japan, the company said in a statement. "We cannot comment further."

The new plant is being planned as U.S. auto sales plateau and demand for sedans, such as the Corolla, are slipping amid low gasoline prices. Auto makers have been trying to balance production capacity through a combination of production slowdowns and higher incentives.

Toyota, the world's largest auto maker, already has a major manufacturing presence in the Midwest and South with factories in Indiana, Kentucky, Mississippi and Texas. For Mazda, the plant's opening would mark the first time it is building cars in the U.S. since it stopped manufacturing vehicles with Ford in 2012 in Michigan.

Long seen as strong in passenger cars such as the Camry, Toyota has been racing to add more trucks and SUVs to its lineup. The company nearly outsold General Motors Co. in July, but typically holds the No. 3 spot in terms of U.S. vehicle sales.

Toyota often pulls from other plants in the world, including Japan and Turkey, to feed products to U.S. dealerships when supply of popular vehicles runs low. In recent years, Japanese auto makers have shifted more manufacturing to North America to be closer to the U.S. market and reduce exposure to currency fluctuations.

Write to Adrienne Roberts at Adrienne.Roberts@wsj.com

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August 04, 2017 02:47 ET (06:47 GMT)