Toyota announced today that it will build a new subcompact car at Mazda's plant in Mexico to go on sale in North America starting in 2015.

The new car will be built on the platform of the Mazda2, its smallest model in the U.S.

While Toyota did not name of the new model, the Mazda2 and its sister, the Ford Fiesta, compete against Toyota's Yaris. The Yaris hasn't sold well compared to other Toyota small cars like the Corolla. The new model also could be used as a replacement for a sedan in Toyota's Scion youth division, where the xD is nearing the end of a typical life cycle.

Toyota said the new model will start production at the Mazda plant currently under construction in Mexico in the summer of 2015. The plant plans to make 50,000 of the little cars a year, to be sold through Toyota dealerships.

It was only about a year ago that Ford dumped its ownership stake in Mazda, ending their joint development. It's interesting that Mazda has found a new suitor relatively quickly.

Through the agreement, Toyota will be able to shore up its North American vehicle lineup while Mazda is able to get better utilization out of its costly new plant. Mexico lends itself to small-car production because of the popularity of the cars in Central and South America and its famously low labor rates that allow automakers to turn slim profits on small, cheap cars.

USA Today