Toyota and Mazda have entered a new business partnership

Japanese automakers Toyota and Mazda have signed an agreement to enter into a new alliance to cement their current partnership.

The agreement is a result of two years of negotiations between the two companies, where they will build vehicles in the US and undertake significant research and development into the establishment of electric vehicles and connected car technology

The new plant will provide 4,000 new roles within the US, and enable the capacity to build 300,000 vehicles annually, cementing its growth potential within the US market.

Toyota President Akio Toyoda has said: "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."

Analysts at Citi were also positive on the plan: "The reported plan to build a new plant in the US looks rational given that SUV capacity is tight at both companies and protectionism concerns remain," the company has said.

"Also, amid signs that overall U.S. auto demand has peaked, building a plant via a joint venture will reduce the risk for both companies."

Since 2015, Toyota and Mazda have discussed various areas to explore, based on the principle of building an equal and favorable relationship in the long term.

Over the medium- to long-term, the two companies will build a favorable relationship that respects the autonomy and equality of each party and works toward success with the agreed joint projects. With the aim of creating new types of value for future mobility, they will accelerate and enhance bilateral cooperation as long-term partners and contribute to the development of a sustainable society by exceeding customers' expectations.