The two companies have each agreed to buy 50 billion yen ($570 million) worth of shares in their partner. This means, starting from the beginning of October, Toyota will own 5.05 per cent of Mazda's common stock, while Mazda will have a 0.25 per cent stake in Toyota.
As part of their new partnership agreement, the two companies are looking to setup a new factory in the USA by 2021. Said to cost around US$1.6 billion ($2 billion) and employ around 4000 people, Mazda and Toyota will each have a 50/50 stake in the new plant.
Mazda will use the new factory to produce crossover vehicles it "will newly introduce to the North American market", while Toyota will make Corollas there for sale across the USA, Canada and Mexico.
The last time Mazda made a car in the States was 2012, right before the company sold its 50 per cent share in the AutoAlliance factory in Flat Rock, Michigan, back to Ford.
Above: Ford Probe used the Mazda 626 platform, and was produced in a Ford/Mazda joint venture plant.
The two Japanese automakers will work together on electric vehicle technology. At present, Toyota supplies hybrid vehicle components to Mazda, which uses them for a special Japan-only hybrid variant of the Mazda 3.
Toyota and Mazda will also collaborate on infotainment technology, including internet connected systems. On the safety front, Toyota will share its vehicle-to-vehicle and vehicle-to-infrastructure know how with the smaller car maker.
Above: Toyota Yaris iA.
Concerning joint model development, badge engineering and platform sharing, the two companies have pledged to "further explore the possibilities of ... complementary products on a global level".
Currently, the Mazda 2 sedan is made in Mazda's new Mexico factory. For the US and Canada markets, this car is sold exclusively as the Toyota Yaris iA.
In return, Mazda will rebadge one of Toyota's two-box vans for the Japanese market, possibly as a replacement for the Bongo (E-Series) range.
This latest development extends the "long-lasting partnership” Toyota and Mazda formally entered into in May 2015. The original partnership focussed on drivetrains and safety technology, as well as discussions about further collaboration.
Above: The current Mazda Bongo debuted back in 1999.
In a statement marking the announcement, Akio Toyoda, president of Toyota, said: "The greatest fruit of our partnership with Mazda is that we have found a new partner who truly loves cars.
"It has also sparked Toyota's competitive spirit, increasing our sense of not wanting to be bested by Mazda. This is a partnership in which those who are passionate about cars will work together to make ever-better cars. It is also the realisation of our desire to never let cars become commodities."
CEO of Mazda, Masamichi Kogai, responded, "Nothing would please me more than if, through this alliance, we can help to energise the auto industry and create more car fans by bringing together two competitive spirits to spur each other on, leading to innovations and fostering talent and leaders".