Toyota Motor Co. (TM) - Get Report will take a stake in rival Mazda Motor Corp. (MZDAY) , the companies confirmed Friday, and jointly invest in a new U.S. production facility that could create 4,000 new jobs.
Japan's Nikkei news organization first reported Friday that Toyota is planning to take a 5% stake in Mazda as part of a previously-stated plan to develop clean-energy and self-driving vehicle technologies. The two groups confirmed the purchase and said they would combine to invest in a U.S. plant under a cooperation agreement the two groups first revealed in May 2015.
"The greatest fruit of our partnership with Mazda is that we have found a new partner who truly loves cars." said Toyota President Akio Toyoda. "It has also sparked Toyota's competitive spirit, increasing our sense of not wanting to be bested by Mazda."
"This is a partnership in which those who are passionate about cars will work together to make ever-better cars. It is also the realization of our desire to never let cars become commodities," he added.
The $1.6 billion facility, when completed in 2021, will employ around 4,000 people and be capable of producing as many as 300,000 cars a year, the companies said. Toyota's Georgetown, Ky. facility has the capacity to make 550,000 cars a year while Ford Motor Co.'s Kansas City Assembly Plan in Claycomo, Mo., America's biggest, churns out more than 460,000 vehicles a year and employees 7,000 people.
The Toyota/Mazda investment would be the latest in a series of high-profile job creation announcements since President Donald Trump was elected late last year, the most recent coming last month when Taiwan's Foxconn, one of the most important suppliers to Apple Inc. (AAPL) - Get Report , said it would invest $10 billion over four years to build a new LCD flat panel display plant in Wisconsin and hire as many as 13,000 people.
The reports come ahead of a joint Toyota/Mazda webcast, slated for 6 am eastern Friday, after the world's second-biggest carmaker posted better-than-expected first quarter earnings and boosted its full-year profit outlook.
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Toyota said after the close of Tokyo trading that it now sees operating profits of around ¥1.85 trillion ($16.8 billion) for its fiscal year, which ends on March 31, compared to a previous forecast of ¥1.6 trillion. Toyota also said it sees full-year revenue of ¥28.5 trillion and net income of ¥1.75 for the year as it adjusted its dollar/yen exchange rate assumptions to 110 from 105 and its euro/yen forecast to 124 from 115.
For the three months ending in June, Toyota posted operating profit of ¥574.2 billion, down 10.6% from the same period last year but ahead of the Thomson Reuters estimate of ¥538.3 billion. Toyota shifted 2.59 million cars over its fiscal first quarter, up from 2.529 million last year, taking revenue 7% higher to just over ¥7 billion.
Interestingly, despite the dollar weakness, which has lifted the value of the yen against the greenback by some 4% since early June, Toyota was the only Japanese automaker to increase its U.S. sales last month, thanks in part to the popularity of its RAV4 SUV cross-over model.
Toyota shares closed at ¥6,216 each in Tokyo after falling 0.14% on the session and extending their year-to-date decline past 9.6% compared to a 4.38% gain for the Nikkei 225 benchmark.
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