Toyota Motor Corp. and Mazda Motor Corp. are close to forming a capital partnership, paving the way for the possible formation of a joint-venture assembly plant in the U.S. and joint development of electric vehicle technology, the Nikkei Asian Review reported.
Under the negotiations, Toyota would acquire a roughly 5 percent stake in Mazda, which would then invest in Toyota as well, said Nikkei, which cited an unnamed source in initially reporting the plan.
The plant would employ 4,000 workers, build 300,000 vehicles a year and start production in 2021, various news outlets said. Toyota Corollas and Mazda crossovers will be built at the factory, the reports said.
The deal is expected to be announced on Friday.
A person briefed on the matter, who was not authorized to speak to the media and requested anonymity, confirmed the Japanese carmakers were planning to build a large plant in a yet to be determined U.S. location and planned future joint efforts on electric vehicles, Reuters reported.
Mazda declined to comment, and Toyota said only that it was planning to seek board approval for additional collaboration with Mazda.
“In May 2015, Toyota and Mazda signed a memorandum of understanding to explore various areas of collaboration," Toyota said in a statement. "We intend to submit a proposal to our board of directors today regarding the partnership with Mazda, however, we would like to refrain from providing further comment at this time."
The Japanese automakers are looking to build an assembly plant together in the southern U.S., Nikkei reported.
Mazda already builds cars -- the Toyota Yaris and Yaris iA -- for Toyota at a plant in Salamanca, Guanajuato, Mexico.
The partnership would ease the companies' investment outlays and allow them to share expertise in particular production technologies, the Nikkei said, adding that the automakers were also planning to develop EV technologies jointly.
Toyota, the world's second-largest automaker by vehicle sales in 2016 and Japan's dominant car company, has been forging alliances with smaller Japanese rivals for several years, effectively consolidating the Japanese auto sector.
If Toyota and Mazda agree to build an assembly plant in the United States, it would likely become the prize in a fierce competition among Midwestern and Southern states eager to expand manufacturing jobs.
President Donald Trump in January criticized Toyota for importing cars to the U.S. from Mexico and has made it a top priority to increase the number of U.S. factory jobs.
Reuters contributed to this report.