A new Toyota assembly plant will provide 4,000 new jobs as part of a $10 billion investment in the United States over the next five years, according to the Japanese automaker.
The new factory aims to produce 300,000 vehicles a year and expects to employ about 4,000 people.
After reassessing the market, Toyota has changed its plan to make Corollas at a plant in Guanajuato, Mexico, now under construction, and instead will produce Tacoma pickups there, Toyota President Akio Toyoda said.
The two automakers are also expected to announce investments in each other.
When revealing the 2018 Toyota Camry at the Detroit auto show, Toyota touted several graphics on the screen behind the new, shiny cars. Industrywide, cars made up just 37 percent of total US sales in the first six months of the year.
Toyota lost its title as the world's biggest automaker to German rival Volkswagen Group in calendar year 2016, with worldwide volume inching ahead just 0.2 percent to 10.2 million vehicles.
"There will be no substantial impact on Toyota's investment and employment plan there", the Japanese vehicle manufacturer said. "A great investment in American manufacturing!" he tweeted Friday morning.
A person briefed on the matter, who did not want to be identified because an official announcement has not been made, confirmed the partnership. It is expected to build its 1 millionth vehicle this year. In 2015, the two manufacturers also agreed to link up in the development of environmental and safety technologies and have since been considering concrete measures.
Roughly 4,000 jobs will be created as part of the plan. According to reports, Toyota won't have an offering in this segment until early next decade. The compact model is now made in Canada and in the U.S. state of Mississippi. Toyota is buying nearly 32 million newly issued common stock shares to the tune of 50 billion yen (£345m) while Mazda is taking on some of Toyota's treasury stock that's equivalent in value.