Mazda and Toyota made a deal back in 2015 wherein the two brands dubbed it as a “mutually beneficial long term partnership”. Two and a half years have passed since the announcement and 2018 marks a significant step forward for Toyota and Mazda.

This year, the two Japanese marques have announced that they will be building cars in the same facility for the joint-venture. The new plant will be built in Huntsville, Alabama, the same city where Toyota builds engines for the Camry, Tacoma, Highlander, 4Runner, Sequoia and Tundra.

It will be Toyota's second plant in the state of Alabama. Meanwhile, it will be Mazda's first production base in the USA since Ford sold their shares in the company. Furthermore, the factory represents a $1.6 billion investment that Mazda and Toyota plan to make with equal funding contributions. Production is expected to begin by 2021, according to Toyota and Mazda.

The new plant will have the capacity to build 300,000 vehicles annually, with production split evenly between two lines for each company. There, the plant will produce Mazda’s crossover model that will be newly introduced to the North American market (likely the CX-8) and the next-generation Toyota Corolla. Toyota and Mazda will share more products in Japan and the global market. At the moment, Mazda sells the 2 Sedan in the USA while Toyota is set to offer a commercial van for Mazda in Japan.

Besides building cars together, Mazda and Toyota will be engineering certain vehicles together. Jointly-developed electric vehicles for the global market are also in the pipeline. The two will also work together on improving connected-vehicle technology and advanced safety features. Mazda set to participate in Toyota’s vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) program.

As it stands, Toyota will acquire a 5.05-percent stake in Mazda while gets a 0.25-percent share of the Japanese auto giant.