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Toyota And Mazda To Set Up $1.6 Billion Joint-Venture Plant In The U.S.

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Japanese automakers Toyota Motor Corp. and Mazda Motor Corp. said Friday they plan to spend $1.6 billion to set up a joint-venture auto manufacturing plant in the U.S. - a move that will create up to 4,000 jobs. 

The plant will have an annual production capacity of about 300,000 vehicles, and will produce Toyota Corollas for the North American market. Mazda will make cross-over models there that it plans to introduce to that market, both sides said.

The companies will split the cost for the plant equally.

Toyota said that it changed its plan to make Corollas at a plant in Mexico, now under construction, and instead will produce Tacoma pickups there.

President Donald Trump has been urging Toyota and other Japanese automakers to invest and build more vehicles in the U.S.

Using the same plant to build vehicles can improve cost-efficiency.

EVs have become an increasingly competitive market segment because of concerns about global warming and the environment.

Japanese rival Nissan Motor Co., which is allied with Renault SA of France and Mitsubishi Motors Corp., is the global leader in electric vehicles.

In the past, Toyota, which makes the Prius hybrid, Camry sedan and Lexus luxury models, was not overly bullish on electric vehicles, noting the limited cruise range of the technology. But recent breakthroughs in batteries allow for longer travel per charge.

In 2015, Toyota and Mazda agreed to find new areas where they can work together, but they had not announced specifics.

Toyota already provides hybrid technology to Mazda, which also makes compact cars for Toyota at its Mexico plant.

Mazda, based in Hiroshima, Japan, used to have a powerful partner in Dearborn-based Ford Motor Co., which bought 25 percent of Mazda in 1979, and raised it to 33.4 percent in 1996. But Ford began cutting ties in 2008, and has shed its stake in Mazda.

Also Friday, Toyota reported its April-June profit was 613.0 billion yen ($5.6 billion), up 11 percent from 552.4 billion yen a year earlier. Quarterly sales rose 7 percent to 7.05 trillion yen ($64 billion), as vehicle sales improved around the world, including in the U.S., Europe and Japan.

Toyota sold 2.2 million vehicles for the quarter, an improvement of 42,000 vehicles on-year, and stuck to its earlier projection for global vehicle sales for the fiscal year at 10.25 million vehicles.

Toyota also raised its fiscal full year profit forecast through March 2018 to 1.75 trillion yen ($16 billion), higher than its earlier forecast of 1.5 trillion yen ($14 billion). But that's still lower than the 1.8 trillion yen earned in the previous fiscal year.

Toyota is vying for the spot of the world's No. 1 automaker in global vehicle sales against Nissan-Renault and Volkswagen AG of Germany, as the industry gradually consolidates.

A capital tie-up with Mazda would be the latest addition to Toyota's sprawling empire, which includes Japanese truck maker Hino Motors and minicar maker Daihatsu Motor Co. It is also the top shareholder in Fuji Heavy Industries, the maker of Subaru cars.

© 2017 CBS Interactive Inc.

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