Toyota and Mazda link up to build $1.6 billion U.S. plant, develop electric cars

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Toyota Motor Corp (7203.T) and Mazda Motor Corp (7261.T) 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.

Reuters