Toyota, Mazda to Open Shared Plant in Alabama


Japanese automakers Toyota and Mazda say they will build a joint factory in the U.S. state of Alabama.

Trump tweeted in March he wanted "new plants to be built here for cars sold here". Other foreign automakers have built plants across the South as well.

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

The new plant will have the capacity to build 300,000 vehicles annually, with production split evenly between two lines for each company to produce a new Mazda crossover model that will be introduced to North American markets and the Toyota Corolla.

"We are committed to becoming a "best-in-town company" in the city of Huntsville and the state of Alabama, a new hometown for Toyota and Mazda". The site for the new plant in Huntsville sits just 14 miles from Toyota Motor Manufacturing of Alabama, which produces four-cylinder, V-6 and V-8 engines for several Toyota models. 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.

US President Donald Trump previous year tweeted criticism of Toyota for planning to build a factory in Mexico to distribute to the US market.

The decision to pick Alabama is another example of foreign-based automakers building US factories in the South.

While it's not yet known the amount of tax incentives the automakers received for their new production plant, it has been reported that the two companies sought at least $1 billion in incentives, according to Reuters. "A great investment in American manufacturing!"

To lure the plant, the state offered an incentive package of $370 million in tax abatements and investment rebates, Alabama Commerce Secretary Greg Canfield said. Mazda is also expected to make an SUV at the site.

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.

Over the last 30 years Toyota, along with German and Asian automakers, has built a second auto industry in the United States, rivaling the operations of the Detroit Three automakers in size and employment, but with newer, and fewer unionized, plants. With more than 150 Tier 1 and 2 automotive suppliers in the state as well as automakers, there are approximately 57,000 automotive manufacturing jobs in Alabama. Southern U.S. states have the advantage of good transportation infrastructure, business-friendly regulators and generally anti-union politicians.

The plant would be Alabama's fourth auto assembly plant, following Mercedes-Benz in Vance, Honda in Lincoln and Hyundai in Montgomery.

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