Markets

Toyota, Mazda plan to build factory in Alabama

Toyota, Mazda plan to build factory in Alabama

Toyota will use the plant to build its best-selling compact auto, the Corolla, while Mazda will use it to build a new crossover vehicle.

A person briefed on the decision says Japanese automakers Toyota and Mazda have picked Alabama as the site of a new $1.6 billion joint-venture manufacturing plant.

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

Toyota had originally planned to build a new Corolla plant in Mexico, but after the joint venture plans were announced in August, Toyota changed course and made a decision to build the Tacoma pickup at the plant in Mexico and the new Corolla at the new USA plant. Mazda does not now have any US factories.

The new plant will employ some 4,000 people, with Toyota planning to produce Corolla compact cars and Mazda small- to medium-sized sport utility vehicles. Corolla sales fell 14 percent for the year, to just under 309,000, according to Autodata Corp. The Raleigh News & Observer reported Tuesday that North Carolina had lost out on the project.

A year ago, President-elect Trump criticized Toyota and threatened hefty tariffs against the Japanese automaker if it built its Corolla sedan for the US market in Mexico.

The decision to pick Alabama is another example of foreign-based automakers building USA factories in the South. "Build plant in USA or pay big border tax".




Amid tightening environmental regulations in the US, the likely challenge will be to create new added value, such as locally producing electric cars and replacing production models to better reflect demand. Mazda plans to build new crossover SUVs at the plant.

Toyota has 10 US plants in eight states in an arc running from West Virginia through Kentucky, Indiana, Alabama, Mississippi and Texas. "A great investment in American manufacturing!"

Last year, Toyota acquired a 5-percent stake in Mazda and Mazda acquired a 0.5-percent stake in Toyota to jointly develop competitive electric vehicles.

The plant will be located near Huntsville.

Mazda Motor Corporation President and Chief Executive Officer Masamichi Kogai and Toyota Motor Corporation President Akio Toyoda joined Gov. Ivey and Mayor Battle for the announcement. The state produced 9 percent of the cars made in the USA, the center said. Mazda is also expected to make an SUV at the site. The plan for the Alabama plant appears to reflect Trump's calls for more investment and jobs in the United States.

Alabama started on the road to becoming an auto manufacturing hub in 1993 when Mercedes chose it as the location for a manufacturing plant after the state offered a then-eye popping $250 million incentive package.