Toyota, Mazda to build $1.6 billion plant in Alabama

Reuters
Reuters
Author

11 January, 2018

It will be able to build 300,000 vehicles per year and will produce the Toyota Corolla compact auto for North America and a new small SUV from Mazda, the companies have said.

When Toyota-Mazda announced the joint venture and its plans to locate the plant in the US, state officials made a huge push for the project, which is expected to eventually employ 4,000 people and generate a $1.6 billion investment.

Trump tweeted in March he wanted "new plants to be built here for cars sold here".

The two automakers are aiming to start operations at the plant in 2021. Toyota already has a large presence in Huntsville, as Toyota Motor Manufacturing Alabama already employs 1,450 people.

San Antonio was hoping to attract the plant, which will be built in the Huntsville area and will employ about 4,000 people.

The announcement also comes at a time of declining USA auto industry sales, so it could exacerbate overcapacity and add pressure to cut prices.

The companies originally announced plans for a USA plant in August when the two Japanese automakers signed a joint venture agreement, though the exact location was not known at that time. USA new vehicle sales fell 2 percent in 2017, after hitting an all-time record high in 2016, and are expected to fall further in 2018.

In recent months, the companies had narrowed their choices down to sites in Alabama and North Carolina.

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President Donald Trump had criticized Toyota for taking auto production and jobs to Mexico.

Toyota was one of the earliest foreign manufacturers to bring auto production to the United States, something which it is keen on expanding. Mazda plans to build new crossover SUVs at the plant.

The companies are planning an afternoon announcement about the plant and Alabama Gov. Kay Ivey has scheduled a news conference at the same time to make what her office described as a major economic development announcement. "A great investment in American manufacturing!"

No details have yet leaked regarding any tax incentives provided by the state, though it's been suggested that Mazda and Toyota were seeking at least $1 billion in incentives.

Mazda has a plant in Mexico, a country that also hosts the manufacturing bases of related parts makers, which facilitates parts supplies to the southern U.S.

The plant will be located near Huntsville. It produces most of the cars and trucks it sells in the U.S.at those USA plants and exports some of those cars to other markets. Overall it has 36,000 US employees, not including those at dealerships.

Alabama spent an estimated $250 million to woo Daimler AG's Mercedes-Benz to put an auto plant in Tuscaloosa in two decades ago.


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