Mazda and Toyota Made a Genius Move Ahead of Tariffs to Ensure Their Corolla Cross and CX-50 Would Always Remain Competitive in the U.S. - Here’s the Story Most Publications Won’t Cover

When Toyota and Mazda were planning a pair of new crossovers for the U.S. market, they could have simply leveraged their existing factory locations in Japan, Canada, and other locations to build them. However, Toyota and other companies like Honda and Subaru were having record-breaking sales from crossovers they build inside the U.S. market. The vehicles are high volume, affordable, highly rated for quality, and most important of all, profitable. 

Related Story (2019) - Toyota Pours Resources and Jobs Into Expanding U.S. Manufacturing - Is Your State On The List?

Because Toyota has partnered with Subaru and BMW in recent years to leverage the strengths of both companies, Toyota looked to partner with Mazda for this new plant to build new models specifically for the U.S. market. Toyota has taken an ownership position with Mazda, just as it has with Subaru, and the joint venture manufacturing plant would be an excellent opportunity to bring the two companies even closer together. For Toyota, manufacturing inside the U.S. was not new, but this would be Mazda’s first-ever plant inside the United States since its five-year joint venture plant with Ford from 198-1992 (Thank you TN reader, MiataMan, for this tidbit). 

The partnership, along with some basic details and forecasts, was announced in 2018, during President Trump’s first term (Trump 45). Torque News covers all things Mazda and Toyota VERY closely, so we provided multiple updates and focus stories at that time. In 2022, the very first Mazda CX-50 rolled off the Alabama production line headed for U.S. customers. 

Now that America has again elected President Trump (Trump 47), the plant that Mazda and Toyota teamed up to build in Alabama is more valuable than ever. New tariffs, be they a negotiating tool or serious long-term import duties, have been launched by the new administration to augment the 100% tariffs on all Chinese EVs by President Biden, and the long-standing 25% tariffs instituted by President Johnson in the 1960s on light-duty trucks. With auto tariffs levied by a long list of American Presidents now piling up, manufacturing inside of the market one sells into is becoming the smart strategy.

While strategic manufacturing decisions like establishing domestic plants can shield automakers from tariff-related price hikes, individual vehicle owners still face unexpected challenges that test the resilience of these strategies. Consider the case of a Tesla Model 3 owner who, after an unusual hailstorm, found his vehicle suddenly deemed a total loss by his insurance company. Despite the car's operability, she was offered the option to retain it for $10,000—a decision fraught with financial and emotional considerations. This scenario underscores how unforeseen events can impact vehicle value and ownership decisions, even when broader industry strategies aim to stabilize the market.

The Alabama plant employs 4,000 U.S. workers. It is called “Mazda Toyota Manufacturing, U.S.A., Inc.” It is often shortened to MTMUS or MTM by insiders. It has a production line volume of 300,000 units per year, split about evenly between Mazda and Toyota. The plant doesn't just assemble vehicles. Rather, it also makes the most important parts of a long list of vehicles in-house. In 2024, the plant produced 895,000 engines.

Sales of both of the vehicles being produced on the MTM's lines are production-limited, meaning they are very successful, sell with almost no incentives, and U.S. consumers can take every one produced. The Corolla Cross and CX-50 are big hits for both brands. Both are among the top crossover models in terms of sales for each brand. 

After the latest round of U.S. tariffs from the Trump administration, Canada responded with reciprocal tariffs. This move impacted MTMUS directly. The reporting is varied on this, but our take is that Mazda opted to discontinue producing the Canada-specific version of its CX-50, and hold off on making more. Mazda has plenty of CX-50 inventory in its dealer pipeline for the short term. If the Canadian tariffs remain in place, the U.S. version can easily be substituted, and the volume will be sold in the United States. 

MTMUS was just one example of Toyota pouring massive amounts of resources, jobs and production capacity into the United States during Trump 45. In March of 2019, Torque News produced a spotlight article on Toyota’s expansion into the United States. Here is what the CEO of Toyota North America said about the automaker’s expansion into America at that time:

“These latest investments represent even more examples of our long-term commitment to build where we sell. By boosting our U.S. manufacturing footprint, we can better serve our customers and dealers and position our manufacturing plants for future success with more domestic capacity.”

While there is certainly a lot of fear, uncertainty, and doubt being reported (much of it justified) about auto tariffs today, the fact is that the United States and other countries have had tariffs on autos for the better part of the last 100 years. Smart automakers like Toyota and Mazda recognized the coming sea change over a decade ago and began to shift their capacity into the United States ahead of the expected changes we see today.

 

Do you think the new round of auto tariffs will last indefinitely like the Johnson tariffs did, or will they be used as leverage by President Trump to benefit U.S. manufacturing and to better balance trade imbalances? Tell us your thoughts in the comments below.

Image Notes: Top of page image courtesy of MTMUS public page. Second image showing MTM worker and third image showing engines produced at MTMUS courtesy of Toyota U.S. media image page. 

John Goreham is a credentialed New England Motor Press Association member and expert vehicle tester. John completed an engineering program with a focus on electric vehicles, followed by two decades of work in high-tech, biopharma, and the automotive supply chain before becoming a news contributor. He is a member of the Society of Automotive Engineers (SAE int). In addition to his eleven years of work at Torque News, John has published thousands of articles and reviews at American news outlets. He is known for offering unfiltered opinions on vehicle topics. You can connect with John on Linkedin and follow his work on his personal X channel or on our X channel. Please note that stories carrying John's by-line are never AI-generated, but he does employ grammar and punctuation software when proofreading and he also uses image generation tools.