Japanese based auto manufacturer Mazda will be manufacturing Toyota branded subcompacts at its new plant in Mexico. This will allow Japan’s top automaker to strengthen its North American model line up.

The new agreement was announced on November 9, 2012 and mentioned that Mazda will produce 50,000 subcompacts annually based on the Mazda 2, but under the Toyota brand, by mid 2015. Auto manufacturer Toyota will be investing in equipment and other costs for the increase in the production.

The plant has about 3,000 employees and is set to have an annual production capacity of 140,000 vehicles. Mazda has also been struggling, as its ties with the US automaker Ford Motor Co. weakened.

There is strong speculation that the Hiroshima based auto manufacturer will need a new partner to join hands with, due to intense competition in the industry. In recent times Toyota has recovered reasonably in terms of profits, after facing a few setbacks. Last year, the natural disasters in northeastern Japan has affected their production adversely.

Mazda had partnered with Ford after it faced financial difficulties in the 1960’s. Ford then began a financial partnership with a 7 percent stake, which resulted in various joint projects. During the 1980’s Ford gained another 20 percent financial stake in the company.


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