Toyota and Mazda plan to build an EV assembly plant in U.S.
08-04-17, 12:25 PM
#1
Toyota and Mazda plan to build an EV assembly plant in U.S.
New $1.6B U.S. EV plant
Source
TOKYO — Toyota and Mazda plan to build a $1.6 billion U.S. assembly plant, the two said on Friday, as part of an alliance that will also see the Japanese automakers jointly develop electric vehicle technologies.
The two will take small stakes in each other as part of the tie-up: Toyota, the world's second-largest automaker by vehicle sales last year, will take a 5 percent share of Mazda, extending its dominance in Japan's auto sector. Mazda will take a 0.25 percent share of its larger rival.
The plant, something of a surprise at a time of overcapacity in the U.S. market, will be a boost to U.S. President Donald Trump, who campaigned on promises to increase manufacturing and expand employment for American autoworkers.
The plant will be capable of producing 300,000 vehicles a year, with production divided between the two automakers, and employ about 4,000 people. It will start operating in 2021.
The electric vehicles cooperation, meanwhile, comes as the tightening of global emissions regulations prompts more automakers to develop battery powered cars, as the industry struggles with hefty research costs and intense competition from technology companies over technology like self-driving cars.
As part of the agreement, Toyota and Mazda will also work together to develop in-car information technologies and automated driving functions.
Toyota, Japan's biggest auto company, has been forging alliances with smaller Japanese rivals for several years, effectively engineering a loose consolidation of the Japanese auto sector. It already owns a 16.5 percent stake in Subaru, Japan's No. 6 automaker, with which it also has a development partnership.
Toyota is also courting compact car maker Suzuki to cooperate on R&D and parts supply as Toyota seeks to tap its smaller rival's expertise in emerging Asian markets.
A stake in Mazda may also prevent future incursions by tech companies, one analyst said.
"For a technology company which lacks the expertise in making cars, Mazda could look like a very interesting acquisition. They're very good, they're not too expensive. Maybe Toyota realizes this," CLSA managing director Chris Richter said.
"By buying a 5 percent stake, Toyota takes Mazda off the table rather than having it sit out there like a free agent which could someday be used against them."
The two will take small stakes in each other as part of the tie-up: Toyota, the world's second-largest automaker by vehicle sales last year, will take a 5 percent share of Mazda, extending its dominance in Japan's auto sector. Mazda will take a 0.25 percent share of its larger rival.
The plant, something of a surprise at a time of overcapacity in the U.S. market, will be a boost to U.S. President Donald Trump, who campaigned on promises to increase manufacturing and expand employment for American autoworkers.
The plant will be capable of producing 300,000 vehicles a year, with production divided between the two automakers, and employ about 4,000 people. It will start operating in 2021.
The electric vehicles cooperation, meanwhile, comes as the tightening of global emissions regulations prompts more automakers to develop battery powered cars, as the industry struggles with hefty research costs and intense competition from technology companies over technology like self-driving cars.
As part of the agreement, Toyota and Mazda will also work together to develop in-car information technologies and automated driving functions.
Toyota, Japan's biggest auto company, has been forging alliances with smaller Japanese rivals for several years, effectively engineering a loose consolidation of the Japanese auto sector. It already owns a 16.5 percent stake in Subaru, Japan's No. 6 automaker, with which it also has a development partnership.
Toyota is also courting compact car maker Suzuki to cooperate on R&D and parts supply as Toyota seeks to tap its smaller rival's expertise in emerging Asian markets.
A stake in Mazda may also prevent future incursions by tech companies, one analyst said.
"For a technology company which lacks the expertise in making cars, Mazda could look like a very interesting acquisition. They're very good, they're not too expensive. Maybe Toyota realizes this," CLSA managing director Chris Richter said.
"By buying a 5 percent stake, Toyota takes Mazda off the table rather than having it sit out there like a free agent which could someday be used against them."
08-04-17, 01:40 PM
#2
Lexus Champion
Mexico is still happening, though, it's just going to build Tacomas instead of Corollas.
08-04-17, 04:51 PM
#3
Lexus Champion
None of the other sources I found mentioned that Toyota and Mazda would produce electric vehicles in this joint venture plant; they all said that Toyota would build the Corolla there and Mazda would build a crossover utility vehicle there.
A collaboration between Toyota and Mazda on technology for EVs was mentioned as part of the joint venture but there is no mention of EVs being built in this new plant. Planned to open in 2021, the location has not yet been announced (they are probably awaiting final negotiations regarding what incentives will be provided in return for building the plant). There is speculation that the plant would be in the Southern United States, close to the current Mississippi Corolla plant, to take advantage of current supply lines.
The plant currently being built in Mexico to build the Corolla will instead be shifted to Tacoma production, and open as planned in 2019. That would seem to leave a gap of about 2 or 3 years (from 2019 when Corolla production is moved out of Cambridge, Ontario and 2021 / 2022 when this new Toyota-Mazda plant opens) when there may not be enough Corolla production to supply all of North America. That gap in production of the new (TNGA) Corolla would have to come from elsewhere (Japan or some other Asian plant?).
That tells me that Toyota sees demand for the Corolla dropping or that the Corolla could be imported (from Japan?) and still be profitable.
A collaboration between Toyota and Mazda on technology for EVs was mentioned as part of the joint venture but there is no mention of EVs being built in this new plant. Planned to open in 2021, the location has not yet been announced (they are probably awaiting final negotiations regarding what incentives will be provided in return for building the plant). There is speculation that the plant would be in the Southern United States, close to the current Mississippi Corolla plant, to take advantage of current supply lines.
The plant currently being built in Mexico to build the Corolla will instead be shifted to Tacoma production, and open as planned in 2019. That would seem to leave a gap of about 2 or 3 years (from 2019 when Corolla production is moved out of Cambridge, Ontario and 2021 / 2022 when this new Toyota-Mazda plant opens) when there may not be enough Corolla production to supply all of North America. That gap in production of the new (TNGA) Corolla would have to come from elsewhere (Japan or some other Asian plant?).
That tells me that Toyota sees demand for the Corolla dropping or that the Corolla could be imported (from Japan?) and still be profitable.
08-05-17, 12:12 AM
#4
Lexus Test Driver
Without reading the whole thing, I'm not sure what Toyota has to gain by this. Mazdas are high on style, but Toyota has their own styling thing growing already. Beyond that, they seem to be on similar plains.
08-05-17, 05:42 AM
#5
Lexus Champion
In terms of technology and access to assembly plants, I agree that Mazda, as a much smaller company, gets more benefit. Toyota perhaps gets to share the risk in a new plant in the USA.
Toyota has also been purchasing shares in the small Japanese automakers -- Mazda, Suzuki and Fuji Heavy Industries (Subaru). The speculation is that by investing in the smaller Japanese automakers, Toyota prevents them from being purchased by non-Japanese companies, and that would prevent the hollowing out of the Japanese auto industry, like what happened with the British automakers (Jaguar, Land Rover, Rolls-Royce, Bentley, Mini, Rover, ...).
08-07-17, 11:42 AM
#6
interesting that people are already speculating the return of the of wankel: https://www.autoblog.com/2017/08/07/...rotary-hybrid/
08-07-17, 08:26 PM
#7
Makes sense that Mazda would want a factory in the USA if it really wants to expand its market share. They already opened a factory in Salamanca(sp?) Mexico in 2014 to build the Mazda 3 and Mazda 2(its a sedan, no hatchback, branded as a Scion iA/Toyota Yaris iA in the USA). Makes sense though, as profit margins had to be slim building cars in that 15-25k price bracket in Japan.
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08-08-17, 10:20 AM
#8
Pole Position
Mazda is serious about ICE innovation
SKYACTIV-X next-generation engine
Technological innovations
Features
Moving forward Mazda hopes to help create a future in which people, the earth and society can coexist with cars, to enrich people’s lives through a car ownership experience that celebrates driving, and to become a brand with which customers feel a strong emotional connection.
Technological innovations
- SKYACTIV-X is the world’s first commercial gasoline engine to use compression ignition, in which the fuel-air mixture ignites spontaneously when compressed by the piston
- A proprietary combustion method called Spark Controlled Compression Ignition overcomes two issues that had impeded commercialization of compression ignition gasoline engines: maximizing the zone in which compression ignition is possible and achieving a seamless transition between compression ignition and spark ignition.
Features
- This new proprietary combustion engine combines the advantages of gasoline and diesel engines to achieve outstanding environmental performance, power and acceleration performance.
- Compression ignition and a supercharger fitted to improve fuel economy together deliver unprecedented engine response and increase torque 10–30 percent over the current SKYACTIV-G gasoline engine.3
- Compression ignition makes possible a super lean burn4 that improves engine efficiency up to 20–30 percent over the current SKYACTIV-G, and from 35–45 percent over Mazda’s 2008 gasoline engine of the same displacement. SKYACTIV-X even equals or exceeds the latest SKYACTIV-D diesel engine in fuel efficiency.
- With high efficiency across a wide range of rpms and engine loads, the engine allows much more latitude in the selection of gear ratios, providing both superior fuel economy and driving performance.
Moving forward Mazda hopes to help create a future in which people, the earth and society can coexist with cars, to enrich people’s lives through a car ownership experience that celebrates driving, and to become a brand with which customers feel a strong emotional connection.
01-09-18, 05:04 PM
#9
Lexus Champion
It looks like Huntsville will be the site of the new plant. Both Toyota and Mazda angled for $1B in incentives and tax breaks to do it and the runner up was NC.
Source
Alabama edged out North Carolina as the winner in a multi-state contest for a prized Toyota Motor Corp. and Mazda Motor Corp. joint car factory worth $1.6 billion, a person familiar with the negotiations said. The Japanese automakers have been narrowing the list of possible locations for months. Mazda and Toyota plan to announce their final choice on Wednesday in the Alabama capital of Montgomery, said the person, who asked not to be identified because the news hasn’t been publicly disclosed.
The shared factory Toyota and Mazda plan to open in 2021 is the only new auto assembly plant to be announced under President Donald Trump, who’s pressured Toyota and other carmakers to make more of their vehicles in the U.S. The automakers have pledged to create as many as 4,000 jobs at the new factory. During his November visit to Tokyo, Trump thanked executives from the two companies for their U.S. expansion plans....
The factory is such a highly sought-after prize that Toyota and Mazda were said to press for an incentive package worth at least $1 billion. The new factory will be located in Limestone County north of Birmingham, the person said. The Birmingham Business Journal reported the selection earlier Tuesday. Mazda, which imports all of the models it sells in the U.S., plans to produce crossovers alongside Toyota Corolla compact cars at the new joint plant. The factory will help the automakers hedge currency risks -- and also may keep them out of the White House’s crosshairs.
The shared factory Toyota and Mazda plan to open in 2021 is the only new auto assembly plant to be announced under President Donald Trump, who’s pressured Toyota and other carmakers to make more of their vehicles in the U.S. The automakers have pledged to create as many as 4,000 jobs at the new factory. During his November visit to Tokyo, Trump thanked executives from the two companies for their U.S. expansion plans....
The factory is such a highly sought-after prize that Toyota and Mazda were said to press for an incentive package worth at least $1 billion. The new factory will be located in Limestone County north of Birmingham, the person said. The Birmingham Business Journal reported the selection earlier Tuesday. Mazda, which imports all of the models it sells in the U.S., plans to produce crossovers alongside Toyota Corolla compact cars at the new joint plant. The factory will help the automakers hedge currency risks -- and also may keep them out of the White House’s crosshairs.
01-09-18, 06:35 PM
#10
Pole Position
One billion in incentives is not an investment it's plain stupidity, simple political PR trick to retain voters. Basically the state of Alabama has just paid 4 annual salaries for 4,000 workers in advance. Which in itself is not bad, at least in some fantasy world that's some good deed for people Alabama by state of Alabama but both you and I know that will not be the case cause there will be some heavy cash back money laundry behind that one billion.giveaway. Joint venture investors will have to pour cold cash as donations into selected entities and non profits close to the government people who voted on this decision. That's how it works in real world unfortunately.
01-09-18, 08:16 PM
#11
Lexus Champion
One billion in incentives is not an investment it's plain stupidity, simple political PR trick to retain voters. Basically the state of Alabama has just paid 4 annual salaries for 4,000 workers in advance. Which in itself is not bad, at least in some fantasy world that's some good deed for people Alabama by state of Alabama but both you and I know that will not be the case cause there will be some heavy cash back money laundry behind that one billion.giveaway. Joint venture investors will have to pour cold cash as donations into selected entities and non profits close to the government people who voted on this decision. That's how it works in real world unfortunately.
I am assuming that it includes infrastructure improvements, including providing access roads, and providing electricity, water and sewage feeds to the site. It may include preparing the land (either cleaning and clearing brownfields, or clearing greenfields). Toyota would then only have to spend money to build the actual factory buildings.
The argument for providing such bribes is that it is an investment that will be repaid in taxes paid by the new corporate citizen and the new workers, and the spin-off jobs that will result. Suppliers to Toyota and Mazda may now consider building new plants there also.
But assuming that the plant is going into the already well-established Huntsville area (home to NASA, US Army and other high-tech companies), there is really no need to spend billions to attract a new manufacturing company. Spending like that is usually done to attract new technology companies into depressed areas.
01-10-18, 10:15 AM
#13
Lexus Champion
Toyota has their engine plant just north of Huntsville now, so they already have a presence there. I've spent a LOT of time in Huntsville. It's a nice city with a lot of tech expertise. The research park there is immense.
01-10-18, 08:01 PM
#14
The $1billion in incentives may not all be cash but I agree that it is a bribe.
I am assuming that it includes infrastructure improvements, including providing access roads, and providing electricity, water and sewage feeds to the site. It may include preparing the land (either cleaning and clearing brownfields, or clearing greenfields). Toyota would then only have to spend money to build the actual factory buildings.
The argument for providing such bribes is that it is an investment that will be repaid in taxes paid by the new corporate citizen and the new workers, and the spin-off jobs that will result. Suppliers to Toyota and Mazda may now consider building new plants there also.
But assuming that the plant is going into the already well-established Huntsville area (home to NASA, US Army and other high-tech companies), there is really no need to spend billions to attract a new manufacturing company. Spending like that is usually done to attract new technology companies into depressed areas.
I am assuming that it includes infrastructure improvements, including providing access roads, and providing electricity, water and sewage feeds to the site. It may include preparing the land (either cleaning and clearing brownfields, or clearing greenfields). Toyota would then only have to spend money to build the actual factory buildings.
The argument for providing such bribes is that it is an investment that will be repaid in taxes paid by the new corporate citizen and the new workers, and the spin-off jobs that will result. Suppliers to Toyota and Mazda may now consider building new plants there also.
But assuming that the plant is going into the already well-established Huntsville area (home to NASA, US Army and other high-tech companies), there is really no need to spend billions to attract a new manufacturing company. Spending like that is usually done to attract new technology companies into depressed areas.
Also I'm sure they built this plant in this area due to the skilled workforce. I knew somebody who worked for Nissan and said it was extremely hard to find good entry level workers at that Canton MS plant who could pass a drug test. Finding skilled maintenance techs, engineers, etc in that local labor market was damn near impossible, Nissan had to pay to relocate people there.
01-10-18, 08:28 PM
#15
Lexus Champion
There are going to be a lot more jobs on the supplier end created in this area besides those 4,000 people working at the Toyota/Mazda plant. There are already a lot of suppliers within 100 miles or so that supply to the big Nissan factories in Smyrna TN and Canton MS, along with that Hyundia plant near Montgomery.
Also I'm sure they built this plant in this area due to the skilled workforce. I knew somebody who worked for Nissan and said it was extremely hard to find good entry level workers at that Canton MS plant who could pass a drug test. Finding skilled maintenance techs, engineers, etc in that local labor market was damn near impossible, Nissan had to pay to relocate people there.
Also I'm sure they built this plant in this area due to the skilled workforce. I knew somebody who worked for Nissan and said it was extremely hard to find good entry level workers at that Canton MS plant who could pass a drug test. Finding skilled maintenance techs, engineers, etc in that local labor market was damn near impossible, Nissan had to pay to relocate people there.
Toyota had problems, if I remember, attracting skilled workers for its Mississippi plant that now builds the Corolla.
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