Car Industry

Toyota and Mazda teaming up to build $1.6 billion US factory

The Japanese automakers move to bring more production to America, possibly as a response to Trump.

Most foreign automakers have at least some production capability in the US, most of which is dedicated to trucks and SUVs. Perhaps as a response to threats by our president that the government would begin to levy tariffs on imported vehicles, Toyota and Mazda are reportedly set to announce plans that they are jointly building a $1.6 billion factory in Huntsville, Alabama.

Toyota already has a presence in the state thanks to an engine manufacturing facility. Mazda has never had its own US factory, though it did share some production with Ford at one time. The new plant will employ upward of 4,000 people and is expected to produce approximately 300,000 vehicles per year, including the Corolla.

Toyota was one of the earliest foreign manufacturers to bring auto production to the United States, something which it is keen on expanding.

Toshifumi Kitamura/AFP/Getty Images

Representatives from Toyota and Mazda, as well as the state of Alabama, are expected to formally announce the venture later today. The plant is supposedly scheduled to open in 2021 and will be built concurrently with a series of upgrades to Toyota's existing Huntsville plant, which were announced in September of 2017 according to Reuters.

No details have yet leaked regarding any tax incentives provided by the state, though it's been suggested that Mazda and Toyota were seeking at least $1 billion in incentives. While that sounds crazy, most states lobby quite vigorously for the chance to host auto factories, thanks to the uplifting effect that can have on local economies.

"The impact of an auto assembly plant extends beyond its immediate economic impact, and that's why states offer robust incentives," said Dennis Cuneo, a site-selection consultant and former Toyota executive. "It creates a halo effect that in turn helps attract other projects."

This venture also wouldn't be the first time that Alabama rolled out the red carpet for an auto manufacturer. The Heart of Dixie spent more than $250 million to attract Mercedes-Benz to Tuscaloosa in the 1990s.