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Mazda to build Toyotas in Mexico

New Toyota sub-compact to be based on Mazda2

Published: November 9, 2012, 3:00 PM

2011 Mazda2

Toyota and Mazda have jointly revealed that Mazda's new Mexican assembly plant, which is currently under construction, will build a Toyota-branded sub-compact for sale primarily in North America.

Perhaps more surprisingly, not only will Mazda build the new Toyota, it will be based on the Mazda2.

Mazda production in Mexico is expected to begin during the fiscal year ending March 2014, but start-of-production of the Toyota vehicle won't occur until the summer of 2015. Its production rate is planned to be around 50,000 units per year, while Mazda projects a plant capacity of 140,000.

Mazda will also produce Mazda2 and Mazda3 models in the plant, which is located in located in Salamanca city, Guanajuato state, Mexico.

Toyota is said to be investing an appropriate portion of the costs for development and production equipment related to the Toyota vehicle as well as an appropriate portion of costs related to the plant's increased production-capacity.

For Mazda, the deal is an opportunity to increase both production efficiency and profitability. For Toyota, its a means of expanding its North American vehicle lineup at a relatively low cost.

Both Mazda and Toyota have concluded similar deals with other companies recently. Mazda is co-developing the next MX-5 (Miata) with Alfa Romeo and both will sell their own variants of that car while Toyota is already selling a Scion FR-S version of Subaru's BRZ sports car.