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Toyota, Mazda To Build U.S. Plant, Swap Equity Stakes

Toyota, Mazda To Build U.S. Plant, Swap Equity Stakes.

Mazda Then Announces First Petrol Compression Ignition Motor.

Toyota Motor and Mazda Motor created a stir with new developments, including an equity swap deal between the two, an agreement to build a joint factory in the U.S., and then Mazda topped it off with news it will sell the world’s first compression ignition petrol engine.

Toyota will take a 5 per cent stake in Mazda while Mazda buys 0.25 per cent of Toyota. The two will build a joint-venture factory in the U.S. with a capacity of 300,000 vehicles a year with half used to make Toyota Corollas and the rest for Mazda SUVs. The plant, costing $1.6 billion, will open in 2021. The location has yet to be decided.

The two will also cooperate on hybrid, electric and connected cars.

Toyota’s existing relationship with Suzuki focuses on safety and environmental technology, said BMI Research, and builds on Suzuki’s success in emerging markets. Mazda already cooperates with Fiat on the MX-5/Fiat 124 Spider.

Toyota also reported an 11 per cent drop in operating profit in its latest quarter as incentive spending in the U.S. and foreign exchange losses hit the bottom line. But Toyota said it expected profitability to improve over the financial year ending March 31, 2018. Operating profit is expected to slide only 7.2 per cent to $16.47 billion, an improvement on May’s expectations of a 20 per cent dive.

Nice timing
According to Evercore ISI, the latest quarter’s figures still represented an 8.1 per cent profit margin.

Mazda then added to all the excitement by unveiling plans to sell cars in 2019 with compression ignition engines, a cleaner more fuel efficient petrol engine that has been rumoured for years to be on the point of launch by various big car makers. The engine ignites petrol through compression, eliminating spark plugs. Its fuel economy matches diesel engines without high emission of nitrogen oxides or soot particulates. It would be 20 to 30 per cent more efficient than current internal combustion engines.

Nice timing, Mazda.


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