Toyota and Mazda to build $1.6 billion factory in the U.S

For creating more than 4,000 jobs in the United States, Toyota and Mazda announced to construct the manufacturing plant for 1.6 billion U.S dollar.

On Friday the automakers of Japan said in the statement that is not specifies yet where to build but the facility would be operational from 2021.

Toyota will produce its new Corolla model while Mazda will produce new crossover automobiles for the market of United States at the new plant.

U.S president, Doland Trump threat to impose a “huge tax” on Toyota Company if they did not build a plant in United States. It is seen that they decided to build plant due to Donald Trump as he criticized Toyota to build new factory in Guanajuato, Mexico.

Japanese firms plan to produce Tacoma pickup trucks at the Mexico plant rather than the Corolla, announced on Friday. The world’s best car selling company planned to build Corollas at the Mexico plant.

This news greeted and explained by Trump on twitter as a “huge venture in American manufacturing”

After separating the joint partnership with Ford motors, Mazda has not made any car in U.S and Corollas sold in U.S are made in Mississippi, Canada and Ontario while their plants are in Indiana, Texas and Kentucky.

Subsidies and tax incentives will offered by state and local government to plot a factory which manufactures 300,000 automobile per year, so the purpose of new plant in U.S is to start a competition in states over its position.

In next five years, Toyota decided to invest $10 billion in U.S.

A new partnership announced on Friday by Toyota and Mazda which is much smaller and this is example of merging in auto industry, Mazda will buy a stake of 5% in Toyota and they will pay $450 million for 5% stake in Mazda according to contract.

Automakers further said that they will cooperate on security and technology for electric automobiles at new plant in U.S.

The traditional industry winners will face challenges from rival companies like Nissan and Renault as General Motors won the title in 2011 and Volkswagen in 2016 as top automakers replacing Toyota.

On Friday, Akio Toyoda said that industry need merging as competition increases in from technology firm like Apple, Google and Amazon as they are developing self-driving cars.

Further in press conference he said that “they had been challenged by business players” so that’s why “without any argumentative view, it is essential that automakers must gather against increasing challenges”

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