Toyota Gives Up on Making Small Cars, Turns to Mazda for Their Mazda2

I never thought that I would see the day to where Toyota would give up trying to build a certain type of car, only to ask for help from another automaker. Oops, actually, I did…it’s called the Scion FR-S (and the Subaru BR-Z, thanks to Subaru).

Well, it looks like they’re having to turn to another automaker to build their next B-segment car. You know, it’s interesting that Toyota has never really invested in building any brand name equity into this particular segment of vehicle. First we had the Toyota Tercel (and the Toyota Paseo hatchback), then the Echo, and now the Yaris. Presumably, the Yaris is going away to make room for a car that’s coming from none other than Mazda!

Yes, that’s right…the much smaller, yet more enthusiast-friendly automaker that’s also from the Land of the Rising Sun has inked an agreement to build a vehicle that’s based on the Mazda2 (presumably the next generation, as I can’t foresee them not significantly updating this car before then), starting production in the summer of 2015. That’ll leave both the Mazda2 and the Toyota Yaris to languish on the dealer’s lots for at least a couple of more model years (2013s are starting to roll out now). It seems odd that Toyota would give up altogether, seeing how the Yaris has only been around in its current generation since 2010. However, the Mazda2 has been in production since 2007.

At least here in North America, where it has also been announced that most of these vehicles are going to be produced and sold (unlike in China, where they’re ramping up their own small vehicle for that market).

More specifically, the Mazyotas will be produced at Mazda’s Salamanca, Mexico facility, which is located in the Mexican state of Guanajauto. The closest major city is Guadalajara.

This agreement will benefit Mazda far more than it will Toyota, as it will be able to spread out the research and development costs over another vehicle, instead of just the upcoming Mazda2. For a relatively small company, the production efficiency and financial impact will be enormous. Conversely, Toyota gets a small car that they don’t have to produce in Japan, thus avoiding the “fluctuation” of the yen’s strength versus the dollar. In other words, now that Japan can no longer manipulate the currency, Toyota will have to play ball, just like everyone else.


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