Toyota President Akio Toyota and his Mazda counterpart Kogai announce their alliance.
Toyota and Mazda are expected to announce that Huntsville, Alabama will be the site for a $1.6 billion auto plant after a search that stretched out for several months and nearly a dozen states.
In recent years, Asian and European manufacturers have made Alabama a center of automotive manufacturing and in 2017, the state churned out more than 1 million vehicles at plants operated by Toyota, Honda, Mercedes-Benz and Hyundai.
The Toyota-Mazda assembly plant will be built in the Huntsville area in Limestone County, according to news services that have been briefed on the impending announcement. The exact site hasn’t been officially announced yet.
The new plant will be operational by 2021 and eventually will employ about 4,000 people, reports said.
Alabama and North Carolina apparently were the finalists for the huge factory during the site selection process, which was managed by Toyota.
(Alabama, North Carolina finalists for new Toyota/Mazda auto plant. Click Herefor the story.)
Mercedes-Benz is one of several automakers with plants in Alabama, drawing a network of supplier with them.
But Alabama appeared to have an edge since during the past 20 years it has developed a network of factories belonging to automotive suppliers that have followed the other automakers into the state. Only last September, Mercedes-Benz confirmed plans to build vehicles for its new EQ line of electric vehicles at its plant in Tuscaloosa, Alabama.
The new Toyota-Mazda plant is expected to be outfitted to build as many 300,000 vehicles per year and will produce the Toyota Corolla compact car for North America and a new small SUV from Mazda, the companies have said.
In addition, Huntsville area already has a Toyota engine factory that employs nearly 1,500 people. The decision to pick Alabama is another example of foreign-based automakers building U.S. factories in the South.
The companies have located there due largely to lower wages and to avoid the United Auto Workers union, which has been unsuccessful in its efforts to organize workers in the new automotive plants in the South.
(Click Here for details about the new partnership between Toyota, Mazda and Denso.)
Toyota and Mazda are forming a joint venture and splitting the cost for the plant equally.
The announcement of the plant comes at a time when sales have stopped growing and the industry is beginning to wrestle with the potential for overcapacity in North America after a huge build of production capacity during the last decade.
However, the announcement comes after the Trump administration applied intense pressure to make invests in the U.S. rather than Mexico. Ford scrapped plans for a new factory in Mexico last and Toyota Motor Corp. has changed its plan to make Corollas at a plant in Guanajuato, Mexico, now under construction, and instead will produce Tacoma pickups there, Toyota said.
Toyota President Akio Toyoda denied that Trump’s views influenced his decision. “We have been reviewing the best production strategy for our business,” he told reporters in Tokyo at the time.
(Toyota pairing up with Mazda on $1.6B auto plant in U.S. For the story, Click Here.)
But sales of small cars dropped 10% in 2017 and Corolla sales fell 14% for the year, to just under 309,000, according to Autodata Corp.