Toyota began its manufacturing operations in the United States in 1972.
TMC Senior Managing Officer Tetsuya Otake said, "Despite the positive effect of cost reduction efforts, operating income was down 67.9 billion yen, mainly due to the effects of marketing activities and an increase in expenses".
The location has yet to be decided but the source said that the plant was expected to build Toyota Corolla cars and a Mazda crossover utility vehicle. But because SUV demand is susceptible to oil prices and other factors, the automakers will take measures enabling them to easily switch production to other models. With the investment, both automakers can hope to prove their good American corporate citizenship and appease the Trump administration's concerns about jobs moving overseas. Toyota said Trump's views had not influenced the decision. "Because of its strong dependence on North American market, Mazda absolutely needs to expand its manufacturing footprint here".
Alongside Toyota's assembly line, a new Mazda Sports Utility Vehicle (SUV) will also be made at the proposed USA factory, with the two companies hoping production will begin in 2021. Toyota was on the receiving end of one of Trump's tweets for its plans to make the Corolla for the USA market in Mexico.
In addition to the new factory in the US, the automakers said they would collaborate on safety and technology for electric vehicles.
Mazda, whose sales are an eighth that of Toyota, says it lacks the funds to develop electric cars on its own.
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. With the sense of crisis, Mazda chose to approach Toyota. Mazda has not made cars in the USA since a joint partnership with Ford ended.
This would not be Mazda's first collaboration with another vehicle company.
Toyota already provides hybrid technology to Mazda, which also makes compact cars for Toyota at its Mexico plant. At the moment it ships all vehicles sold in the U.S. from its plants in Japan and Mexico. The two Japanese automakers also will work together on electric-car technology.
A share of Mazda might also prevent incursions in the future by tech companies, said one industry analyst on Friday. He commented on Twitter that it was a "great investment in American manufacturing". The traditional industry kings also now face a challenge from a rival alliance anchored by Renault and Nissan.
The electric vehicle market segment has become an increasingly competitive because of concerns about global warming and the environment.
But it downgraded its full-year sales forecast for North America to 2.78 million vehicles from a previous forecast of 2.82 million.