This exchange was rumoured to have occurred on Jeopardy recently:

Contestant #1: I’ll take ‘Japanese Cars’ for 800 dollars, Alex…
Alex: This Japanese subcompact sedan is made in Mexico by Mazda Motor Corporation and sold in Canada, Mexico and Puerto Rico. What is it called?
Contestant #1: What is the Mazda2?
Alex: Incorrect.
Contestant #2: What is the Scion iA?
Alex: Wrong again. The correct answer is, What is the Toyota Yaris Sedan?
Contestants #1 and #2: WTF!

Okay, maybe not that last part, but when it was announced at last year’s New York Auto Show that the new 2016 Scion iA sedan was actually a restyled, rebadged Mazda2 sedan built in Mazda’s new plant in Mexico, and that the Canadian version would be badged as the 2016 Toyota Yaris sedan, Canadian and American consumers must have been wondering what’s going on. Why would Toyota sell a Mazda in Toyota’s showrooms? And will it be as reliable and fuel efficient as a comparable Toyota sedan?

The answer to the first question is mostly about economics. Profit margins on small cars are thin, especially if they’re built in high-wage countries like Japan which also have a strong currency – that was the case with the last Yaris Sedan which was built in Kariya, Japan and dropped from the Canadian line-up in 2013. Low-wage, low-tax countries like Mexico, which is also much closer to the USA and Canada, can manufacture cars much more economically. Since Mazda doesn’t sell the Mazda2 sedan in Canada and recently discontinued the Mazda2 hatchback, Toyota struck a deal with Mazda to rebadge/restyle the Mexican-built Mazda2 sedan as a Toyota Yaris sedan for the Canadian market.

Note that the current Yaris hatchback, which is built in Valenciennes, France in a Toyota plant, is a completely different car with a Toyota platform and powertrain. Since Mazda also builds a Mazda2 hatchback in Mexico, it’s not unreasonable to speculate that Toyota will replace the French-built Yaris hatchback with a rebadged Mexican-built Mazda2…

As far as reliability and fuel-efficiency are concerned, Mazdas have a good reputation for both, though it remains to be seen how good the build quality is at Mazda’s new plant in Salamanca, Mexico.

This time last year: Preview: 2016 Mazda2

Except for its over-sized grille, the 2016 Yaris Sedan’s styling is the same as the Mazda2’s. But what about that grille? Obviously, Toyota hasn’t learned from Mazda’s experience with the second-generation 2010 Mazda3: its oversized ‘smiley’ grille had to be downsized in 2012 after a frosty reception from consumers. Still, the rest of the car – that is to say, the Mazda2 part – is quite stylish. Its curvy lines, flowing roofline and high rear deck work well together. And the overall size and proportions of the Yaris (narrow body, tall roof, flowing roofline) are quite similar to the previous Toyota-built 2012 Yaris Sedan.

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