Toyota and Mazda to build $1.6 billion joint plant in Alabama

Toyota and Mazda to build $1.6 billion joint plant in Alabama

Toyota and Mazda to build $1.6 billion joint plant in Alabama

"The partnership between Mazda and Toyota will expand innovative automotive manufacturing in Alabama", Governor Ivey said.

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.

Most of Toyota's USA plants are in the South, and all are non-union.

For Toyota, this joint-venture plant will be its 11th USA manufacturing facility and represents its further commitment in the US, in addition to the $10 billion in investment over five years beginning in 2017 announced a year ago.

Located close to Toyota's current engine plant in Huntsville, along with the Japanese automaker's extensive network of auto suppliers nearby, the new production plant will employ 4,000 people and roll 300,000 vehicles off the assembly line per year.

In October, Toyota said it would scale back investment in a planned plant in Mexico by 30 percent to $700 million and cut planned annual capacity in half to 100,000 vehicles as it shuffles its production plans to meet market demands. The plan calls for rolling out 300,000 passenger cars a year to the United States market. "By making such cars here in Alabama, we hope that over time our plant will come to occupy a special place in the hearts of our employees and the local community", Kogai said.

Several states had competed for the coveted project, which will be able to turn out 300,000 vehicles per year and will produce the Toyota Corolla compact auto for North America and a new small SUV from Mazda.

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Huntsville Mayor Tommy Battle hailed the Toyota-Mazda decision as a milestone development for the North Alabama city.

Amid tightening environmental regulations in the USA, the likely challenge will be to create new added value, such as locally producing electric cars and replacing production models to better reflect demand.

"With this announcement, our world changes overnight", Battle said. The automakers will consider a plan to operate part of the lines under a mixed production system based on model types, rather than dedicating a line exclusively to each automaker.

Expected to open in 2021, the plant breaks ground at a time where US auto sales are on a decline, meaning increased pressure to cut costs could jeopardize the automakers' plans to scale up USA production. "It vaults Alabama to the top as an industry leader in producing the next generation of cars that will power our nation".

Toyota Motor and Mazda Motor have chosen the southeastern US state of Alabama as the site for a new joint plant costing in the region of $1.6 billion, sources said Wednesday.

Toyota already has a presence in the state thanks to an engine manufacturing facility. Prior to that, they were reportedly considering more than a dozen states.

"We expect the new facility in Huntsville to act as a magnet for substantial new industry investment and job-creation that lifts communities and families across the state", he added.

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