Toyota to take 5% stake in Mazda

Toyota said yesterday that it was taking a 5-per cent stake in Mazda, another Japanese automaker, and that the companies would jointly build an assembly plant in the US and pool resources on new technologies.

The location of the factory was not decided, but the companies said in a statement they hoped the first vehicles would roll off its production lines in 2021. The plant,  which is expected to cost $1.6 billion, would employ about 4,000 workers.

Akio Toyoda, chief executive of Toyota, said in January that the carmaker planned to invest $10 billion in the US over the next five years. Although plans for that spending had been made before the election of president Trump, the timing of the announcement has been widely seen as a response to Trump's vows to promote US manufacturing.

The development comes after the Taiwanese electronics supplier Foxconn joined Trump at the White House to announce its plans to locate a new plant with 3,000 positions in Wisconsin, which promised $3 billion in state tax credits.

Trump welcomed the plans in a tweet early yesterday.  ''Toyota & Mazda to build a new $1.6B plant here in the USA and create 4K new American jobs. A great investment in American manufacturing!'' he wrote.

According to commentators, for Toyota, the investment would help expand US vehicle-making capacity and market boost its efforts against Detroit automakers in the lucrative truck business.

They add, states covet auto assembly plants as they typically pay above-average wages and add jobs at suppliers and service companies.

According to head of consulting firm AlixPartners, Foster Finley, southern states enjoyed advantages including rail and highway infrastructure, proximity to major ports and business-friendly labour, Reuters reported.

Meanwhile, Michigan governor Rick Snyder said in a statement yesterday that legislation approved last week to reduce taxes on business investment "is likely something that would make Michigan competitive over other states for this project."