We already know that Mazda will manufacture a Mazda2-based subcompact vehicle for Toyota at the company’s recently inaugurated plant in Mexico, and according to a new report, the Toyota (most likely the next-generation N.A. Yaris) will also use Mazda’s fuel-efficient Skyactiv engine.

The CEO of Mazda’s operations in Mexico, Keishi Egawa, said the Toyota-branded vehicle will get the high-compression, direct-injected Skyactiv gasoline engine. “They will make model-specific investment for the Toyota vehicle. Stamping, dies – that is theirs, as well as some of the interior design work,” Egawa was quoted as saying by AutoNews. But the Toyota spinoff will use “our engine,” he added.

The executive said the factory will allocate about 50,000 vehicles for Toyota from its full annual capacity of 230,000 units. Production of Toyota-branded vehicles is expected to start after April 1, 2015, but before March 31, 2016. Thanks to the Skyactiv engine, the Yaris replacement model would be one of only a few direct-injection engines at Toyota. Currently, only select Lexus models, the Scion FR-S and some Japanese-market Toyota sedans use direct injection.

The move obviously benefits Mazda as well, as it will allow the carmaker to maximize economies of scale at its Mexican operations. It will also boost Mazda’s image, since the world’s largest carmaker will use its Skyactiv technology.

Production of the next-generation Mazda2, which will be inspired by the Hazumi concept, is expected to begin in Mexico as early as the second half of this year. Unlike the current generation model, the next Mazda2 will offer Skyactiv technology in the U.S. as well.

By Dan Mihalascu

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