Mazda and Fiat work on convertible
The Japanese and Italian firms confirmed that they have signed an agreement for the project.
Each car maker will use its own engines and own styling in their vehicle, they said.
Hiroshima-based Mazda has been struggling, racking up four straight years in the red, after its ties with US car giant Ford weakened.
"Establishing technology and product development alliances is one of Mazda's corporate objectives, and this announcement with Fiat is an important first step in that direction," said Mazda president Takashi Yamanouchi.
Fiat chief executive Sergio Marchionne said working with Mazda was part of an effort to grow into "a truly global brand", and deliver "an exciting and stylish roadster in the Alfa Romeo tradition".
Speculation has been rife that Mazda might need a partner, perhaps one of the emerging Chinese makers, if it hopes to ride out the intense competition in the industry.
For the fiscal year ended March, Mazda's losses ballooned from 60 billion yen (£477 million) to 107 billion yen (£850 million) as vehicle sales declined across all regions except for North America. It is planning a return to the black for the fiscal year through March 2013.
Dearborn-based Ford bought 25% of Mazda in 1979, raising it to 33.4% in 1996. But Ford began cutting ties in 2008, and in 2010 reduced its ownership to 3.5%.