Toyota intends to sell the car, a Toyota-brand subcompact based on the Mazda2, mostly in North America. Mazda will start producing it in the summer of 2015, turning out about 50,000 cars a year.
The production agreement reflects the difficulties of smaller Japanese brands in the U.S. market, even as Toyota and other leading Japanese automakers are strong competitors.
Toyota has been rebounding in the U.S. after a series of setbacks and natural disasters. It has 14 assembly and components plants in North America and also produces Toyota Camry sedans at a Subaru plant in Indiana owned by Fuji Heavy Industries Ltd. It developed the Scion FR-S jointly with Subaru, which produces it.
By contrast, Mazda recently withdrew from the Flat Rock venture in Michigan, where it had built cars jointly with Ford Motor Co. for more than 20 years.
This week, Suzuki Motor Co. said it was pulling out of the U.S. car market, where it has struggled with weak sales, unfavorable exchange rates and high costs to comply with U.S. regulatory requirements.
Mazda is planning to produce around 140,000 Mazda2 Demio subcompacts and Mazda3 Axela compact cars at the factory it's building in Salamanca in the Mexican state of Guanajuato.
Its deal with Toyota is good for both companies, but Mazda stands to benefit more, said Noriyuki Matsushima, a Tokyo-based analyst at Citi Research.
Mazda will not only save on the capital investments required for the new factory, but the additional production for Toyota will lower the plant's fixed production costs per vehicle, he said.
Toyota is likely to benefit by shifting production of subcompact cars to Mexico. Its small car exports from Japan aren't profitable at current exchange rates, with the yen trading near record levels against the dollar.
Source;
http://www.detroitnews.com/article/20121109/AUTO0104/211090391/1148/rss25
