Toyota

Toyota, Mazda to build USD1.6 billion production plant in Alabama

There are indications that Toyota Motor Corp and Mazda Motor Corp are set to have their new a new $1.6 billion auto plant in Alabama.

Reuters reports that the plant is being set up to employ up to 4,000 people and produce about 300,000 vehicles a year, will be located in Huntsville, Alabama, and is a boon for the state, where Toyota has a large engine plant and an existing network of automotive suppliers.

Although both companies are yet to make official statements about the development, it is expected that a formal announcement follows as soon as possible to clear the air.

The United States President Donald Trump had urged automakers to build plants in the United States and add jobs. Trump tweeted in March he wanted “new plants to be built here for cars sold here.”

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

Details of an anticipated tax and incentive package for the investment were not yet known. It has been reported the companies sought at least $1 billion in incentives.

In recent months, the companies had narrowed their choices down to sites in Alabama and North Carolina.