The Toyota tie-up and the 50/50 Alabama joint venture (2017)

From a controlled tie-up to equal cross-holding

The meaning of this tie-up shows in the fact that Mazda returned to a position where it could choose for itself with whom, and how, to join. In the relationship with Ford, its stake had been raised in exchange for crisis financing, and both products and sales network were moved in line with the partner’s global strategy. Against that, the tie-up with Toyota takes the form of matched-value cross-holdings and a 50/50 joint venture — a design that joins with a larger partner yet hands over no initiative. In the shift from a controlled tie-up to equal cross-holding, one can read the will of a mid-tier maker that has regained its independence.

Still, being equal is not the same as being able to stand alone. Mazda still lacks both the capital to build a 300,000-unit-a-year plant by itself and the strength to cover the whole field of electrification as one company, and the structure of filling that shortfall through cooperation with a partner has not changed. The cross-holding tie-up was a choice that carried, at once, the recovery of independence and a realistic accommodation with the wall of scale. As electrification competition drives realignment worldwide, how far Mazda deepens this equal bond, and where it holds a line, looks set to shape its future.