Japanese automakers Toyota and Mazda on Wednesday announced plans to build a mammoth $1.6 billion joint-venture plant in Alabama that will eventually employ about 4000 people. Several states had competed for the coveted project, which will be able to turn out 300,000 vehicles per year and produce the Toyota Corolla compact car for North America and a new small SUV from Mazda. Production is expected to begin by 2021.
“It is a great honor to announce that Toyota and Mazda will be building a new vehicle plant here. I’d like to express our sincere appreciation for the people of Alabama and Huntsville for their support,” said Masamichi Kogai, CEO and president of Mazda Motor Corporation. Akio Toyoda, president of Toyota Motors, said the new facility is something of a homecoming since the company already has one plant in the state. The new Huntsville plant will be just 14 miles from Toyota Motor Manufacturing of Alabama, which produces four-cylinder, V-6, and V-8 engines for several Toyota models.
The decision to pick Alabama is another example of foreign-based automakers building factories in the southern U.S. To entice manufacturers, southern states have used a combination of lucrative incentive packages, low-cost labor, and a pro-business labor environment since the United Auto Workers union is stronger in northern states.
The announcement comes at a time that U.S. sales of small cars fell nearly 10 percent last year as buyers continued a massive shift toward SUVs and pickup trucks. Corolla sales fell 14 percent for the year, to just less than 309,000, according to Autodata Corp. Still, Toyota and Mazda have said their collaboration will respect mutual independence and equality. Toyota already provides hybrid technology to Mazda for a hybridized version of the Mazda 3 for the Japanese market, and Mazda builds the Mazda 2–based Toyota Yaris iA at its Mexico plant.