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Georgetown Kentucky Toyota Plant

The two Japanese auto manufacturers Toyota and Mazda will be partnering for the development of a new $1.6 billion assembly plant in the United States, as well as for the development of electric vehicle technologies. It is expected to begin operations in 2021, but a location for the plant has not yet been decided.

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 previous year, will take a 5 percent share of Mazda, extending its dominance in Japan´s auto sector.

As part of the agreement, as well as electric vehicle technology, Toyota and Mazda will work together to develop in-car information technologies and automated driving functions.

Toyota, which is strong in hybrid vehicles but has been behind in entering the electric vehicle market, apparently judged it necessary to strengthen the development of electric cars in cooperation with Mazda. He threatened to slap a "big border tax" on Toyota cars if the plant isn't built in the U.S. Mazda would also take a stake in Toyota in return. "This is a partnership in which those who are passionate about cars will work together to make ever-better cars", he said.

Toyoda also wants to lead the way in new technologies, such as connected cars and advanced driver-assistance systems, or ADAS.

The prospect of a new factory in the US could set off a competition among states over its location.

Toyota wouldn't say where the plant would be built. Toyota will still move forward with constructing a factory in Guanajuato, Mexico, though the facility will produce the Tacoma mid-size pickup instead of the Corolla as soon as 2019.

The strategy outlay came as Toyota raised its operating profit forecast for the year ending March to 1.85 trillion yen ($16.8 billion), 16 percent higher than the company's earlier prediction. The truck is also assembled in Texas and is ramping up production now in Baja, California, Mexico. He commented on Twitter that it was a "great investment in American manufacturing".

Last year, Toyota sold 378,210 Corollas in the U.S.

The plant will have an annual production capacity of about 300,000 vehicles, and will produce Toyota Corollas as well as a new Mazda crossover vehicle for the North American market. Until past year, Subaru Corp built the Camry for Toyota at a factory in Indiana.

All Corollas now sold in the US are made in Ontario, Canada or Mississippi. Mazda's Hiroshima assembly plant has long turned out front-wheel-drive sedans and sport/utilities alongside the MX-5 Miata and until recently, the RX-8.

The last time Mazda made a auto in the States was 2012, right before the company sold its 50 per cent share in the AutoAlliance factory in Flat Rock, Michigan, back to Ford. Mazda Motor Corp.is headquartered in Aki-gun, Japan.

Going on: "Mazda stands to gain from a deal that gives the small automaker a production foothold in the United States". Working together on green and other auto technology also makes sense as the segment becomes increasingly competitive due to concerns about global warming, the environment and safety.

Meanwhile, Mazda, which has developed its original fuel-saving technology, has been behind in the field of electric vehicles. Previous year it established a division to develop full-sized EVs, shifting gears after long favouring EVs only for short-distance commuting given their limited driving range and lengthy charging time.

This picture shows the logo of Japan auto giants Toyota Motor Corporation and Mazda Motor Corporation in Tokyo on August 4, 2017.

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