Toyota Motor Corporation and Mazda Motor Corporation said Friday they are partnering to establish a joint venture that produces vehicles in the United States. They also plan to jointly develop technologies for electric vehicles, jointly develop connected-car technology, collaborate on advanced safety technologies, and expand complementary products.

The companies have agreed to a capital alliance arrangement that preserves independence and equality for both of them. In the capital tie-up, the two companies have agreed that Toyota will subscribe for and acquire shares to be newly issued by Mazda through a third-party allotment, and at the same time Mazda will subscribe for and acquire third-party allocation shares of treasury stock disposed of by Toyota in the equivalent amount in value to the Mazda shares.

As part of the new alliance, Toyota and Mazda have agreed to explore establishing a joint venture plant in the U.S. with equal funding contributions. The plant would have an estimated annual production capacity of approximately 300,000 units.

Pending approvals and authorization by relevant government agencies, the companies will begin to examine detailed plans with the goal to starting operations of the new plant in 2021. The plant will require a total investment of approximately 1.6 billion U.S. dollars, and will create up to 4,000 jobs, according to a statement by the companies.