Toyota said in a statement that it plans to propose to its board a partnership with Mazda.
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 USA location and planned future joint efforts on electric vehicles, Reuters reported. "We can not comment any further", in a statement.
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A location for the $1.6 billion facility has not yet been picked, but it's expected to have the capacity to build 300,000 vehicles annually while employing 4,000 workers, the sources said.
The partnership would ease the companies' investment burden and allow them to share expertise in particular production technologies, Nikkei said, adding that the automakers were also planning to develop electric vehicle technologies jointly.
The Japanese Nikkei business daily reported Friday the agreement will include working toward setting up a USA joint-venture plant and cooperation on electric vehicle technology. Toyota's US Corolla sales are down almost 9% this year.
Besides investing in one another, the companies are reportedly discussing the possibility of building a new plant in the southern United States.