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New Mazda3 looks just like Mazda Kai concept in spy photos

Just a couple of weeks before the official reveal, one of our spy photographers caught the next-generation Mazda3 out testing in minimal camouflage. The car was a hatchback model, testing alongside a VW Golf and Audi A3, and was only wrapped in thin vinyl. As a result, we can clearly see that the new compact Mazda hatchback looks just like the stunning Kai concept from last year's Tokyo Motor Show. The car features effectively the same nose and profile of the concept. The main grille is larger than the current model, and it leans forward aggressively. The windshield is very low and sleek. The rear portion of the car is dominated by the very thick C-pillar that leans far forward, augmenting the car's athletic stance. The window sill at the rear kicks up sharply, and the rear window doesn't wrap around or bulge out, giving the car a very tight, taut shape. It's not just the outside of the 3 we get to see. We get a good look at the interior. It also looks very much like the Kai's interior, with the focus being the driver. The gauges are flanked by air vents that blend into the shape of the instrument binnacle. The rest of the dashboard is left as uncluttered as possible. The climate controls and vents all reside in the same long horizontal plane. The infotainment screen, which appears to be touch-sensitive based on one spy photo, is canted toward the driver. Mazda's rotary controller does return, as seen in the center console. Also in the center console is the manual shift knob, which we expect, or at least hope, will continue to be available in the U.S. We'll have answers to all our questions about the Mazda3 at the end of this month when it makes its debut at the L.A. Auto Show. We'll also see the sedan version of the car. The powertrain is the biggest mystery at the moment. Mazda showed the Kai with the Skyactiv-X engine, Mazda's spark-controlled compression-ignition gasoline engine. We've driven a development car with the engine, and Mazda seemed to intend the new Mazda3 to use it, but we're not sure if the engine will be ready for the car's launch. If not the Skyactiv-X engine, or perhaps in addition to, Mazda will probably use versions of its current engines. It could carry-over the naturally aspirated 2.0-liter and 2.5-liter four-cylinders currently used. The latter may use the cylinder deactivation now used on the Mazda6 and CX-5. We would love to see the company finally offer the turbocharged 2.5-liter engine from the Mazda6, CX-9, and now CX-5.

Japanese automakers welcome North American trade deal, fear what's next

TOKYO — Toyota, Nissan and Mazda welcomed on Tuesday the revised North America trade deal that left Japanese automakers unscathed, but they may face a bumpy ride when Washington and Tokyo hold new talks on over $40 billion of annual U.S. auto imports from Japan. The United States and Canada reached an agreement on Sunday to update the 1994 North American Free Trade Agreement after Washington had forged a separate trade deal with Mexico in August. The updated deal effectively maintains the auto industry's current footprint in North America, and spares Canada and Mexico from the prospect of U.S. national security tariffs on their vehicles. Mazda, which ships cars to the United States from Mexico and Japan, called the deal a "big step forward". Nissan, which makes the cars it sells in the United States locally as well as in Mexico, Japan and other countries, said it was "encouraged" by the agreement. Toyota, Japan's biggest automaker, said it was "pleased" that a basic deal was reached. Other automakers were not immediately available for comment. While the deal has removed the risk that the disintegration of the pact would have posed to automakers, bigger risks loom large for Japanese firms as a chunk of the roughly 7 million cars they sold in the U.S. last year were shipped from Japan, and a trade deal between Washington and Tokyo has yet to be agreed. The United States and Japan last week agreed to begin fresh trade talks, with U.S. President Donald Trump seeking to address Japan's $69 billion trade surplus, of which nearly two-thirds comes from auto exports. Washington is also investigating the possibility of slapping 25 percent tariffs on auto imports on national security grounds, although it has agreed with Japan to put any new tariffs on hold during the talks. Analysts say the United States may take a tougher stance on auto imports from Japan than from its neighbors. "If Japan requests an exemption from the 25 percent tariffs under consideration, Washington could propose a more strict cap on imports than it agreed to with Mexico and Canada," said Koji Endo, senior analyst at SBI Securities. "That would be a risk." This could be a big blow to Japan, as the United States is a key source of revenue for Japanese automakers including Toyota, Nissan and Honda. The U.S. market accounts for a quarter or more of their annual global vehicle sales, and of their total U.S.

Toyota, Mazda form electric car technology venture

TOKYO — Toyota has established a new venture to develop electric vehicle technology with partner Mazda, seeking to catch up with rivals in an increasingly frenetic race to produce more battery-powered cars. Policymakers in key markets like China are pushing a shift to electric cars over the next two to three decades, while relatively new rival Tesla is gaining momentum and diesel cars are going through the fallout of the Volkswagen diesel scandal, pressuring traditional automakers to crank up plans for fully electric vehicles (EVs). At the same time, declining battery costs are enabling more power to be packed into cars, making an electric car future easier to imagine. Toyota said in a statement the new company will develop technology for a range of electric cars, including mini vehicles, passenger cars, SUVs and light trucks. Toyota will take a 90 percent stake in the joint venture, called EV Common Architecture Spirit Co Ltd, while Mazda and Denso Corp, Toyota's biggest supplier, will each take 5 percent. The plans build on a partnership announced in August when Japan's biggest automaker agreed to take a 5 percent stake in Mazda and two said they would jointly develop affordable electric vehicle technologies. Although Toyota is providing most of the financial firepower and existing EV know-how, Mazda's engineers have gained the admiration of the industry with breakthrough technologies such as its compression ignition engine announced last month. Shares in Mazda surged to end the day 3 percent higher, while those in Denso rose 1.8 percent. Toyota shares were flat. Both automakers are somewhat behind rivals, with neither having a fully electric passenger car on the market yet. After years of focusing on bringing hydrogen fuel cell vehicles to the market, Toyota last year set up a division to develop electric cars which is led by President Akio Toyoda, and said it plans to introduce EVs in China in the coming years. Toyota has also announced it will bring a game-changing solid-state EV battery to market by 2022. That division would continue as a separate entity from the new joint venture, a Toyota spokeswoman said, while adding that the two teams would co-operate on technology development. Mazda has an R&D budget a fraction of Toyota's, which has made it difficult to develop electric cars on its own. Even so, it has said it plans to launch EVs in 2020.