Trump touts new factories after W.Va. rally

  • Trump touts new factories after W.Va. rally

Trump touts new factories after W.Va. rally

Trump's pressure to build more vehicles in the US may have affected the timing of Mazda's decision to start manufacturing cars in the USA, as well as Toyota's decision to boost its presence, said John Shook, chief executive of the Lean Enterprise Institute in Cambridge, Massachusetts.

The pair will invest $1.6 billion to build a factory in the United States to produce cross-over models and Toyota's Corolla sedan starting from 2021.

Trump earlier this year threatened Toyota with a border tax after it announced plans to build a new factory in Guanajuato, Mexico.

The two Japanese auto makers also will form a joint venture to co-develop electric vehicles, safety features and connected-car technologies, the person said. Toyota will pay about $450 million for a 5% stake in Mazda as part of the deal, while Mazda will buy a stake of the same value in Toyota. The companies said in 2015 that they were exploring ways to expand their partnership.

Toyoda also noted the growing competition from newcomers in the auto industry like Google, Apple and Amazon, stressing he was anxious about autos turning into commodities. "It has also sparked Toyota's competitive spirit, increasing our sense of not wanting to be bested by Mazda". With the sense of crisis, Mazda chose to approach Toyota.

As many automakers struggle with slowing demand in the USA auto market, one of Japan's smaller automakers has managed to buck the trend by sticking to an unconventional marketing strategy, along with a little "love".

From Mazda's point of view, building cars in the U.S. for the USA will help the brand's growth. At the moment, Mazda ships all vehicles sold in the U.S. from plants in Japan and Mexico. The compact model is now made in Canada and in the U.S. state of Mississippi. Toyota, in particular, has decades of invaluable expertise in hybrids, and is rumoured to be working on seriously next-gen solid-state battery technology for full-electric cars, having intentionally avoided the current tech, which isn't good enough to persuade the public.

"Given the massive level of competition in the industry, partnerships are no longer a surprise", said Akshay Anand, an executive analyst at Kelley Blue Book. The planned investment may prove advantageous to US President Donald Trump, as it appears to bolster his mission to reinvigorate US manufacturing. Traditional automakers now face a challenge from the Renault and Nissan and Mitsubishi alliance. "So this is an easy marriage for both parties".

Toyota ramped up incentives to move slow-moving passenger cars, but it hopes to rein in the outlays with the launch of the next-generation Camry sedan later this year.