Toyota, Mazda Confirm Alabama Home to New Plant

Japanese automakers Toyota and Mazda confirm reports their new $1.6 billion U.S. vehicle-assembly plant will be located in Huntsville, AL.

A location in North Carolina had been rumored, but Toyota and Mazda today make if official that Alabama will get the plant, which is expected to start production in 2021 and eventually produce 300,000 vehicles per year.

Toyota says output will be “split evenly between two lines for each company.” Mazda will assemble a new-to-North America crossover, while Toyota will build the Corolla, as previously announced. Toyota holds a 5% stake in Mazda.

Toyota CEO Akio Toyoda infers the automaker’s 15-year presence in Huntsville, where it has operated a 700,000-unit annual capacity engine-manufacturing plant since 2003, played a large role in the automaker selecting the city for its new joint-venture vehicle-assembly plant with Mazda.

“I believe a hometown is critical for sustainable growth,” Toyoda says during a livestreamed webcast of the official ceremony announcing the plant.

The site of the new facility is 14 miles (23 km) from the Huntsville engine plant.

Alabama Gov. Kay Ivey credits the “the quality of (the Alabama) workforce” as the reason why Toyota and Mazda selected the state for its new plant. She notes once up and running, some 4,000 jobs are expected to be created at the plant with an average annual salary of $50,000.

It is unclear how many indirect jobs will be created at the plant, such as at suppliers that may locate nearby, or how much in tax credits Toyota and Mazda will receive to offset startup and/or operating costs.

Mazda CEO Masamichi Kogai says he expects Mazda’s first U.S. plant to “enhance (our) sales” in the States, noting the two automakers will “use the extent of our combined technology capabilities” to achieve world-class efficiency and quality levels at the site.

Huntsville Mayor Tommy Battle used the current industry buzzwords – mobility and artificial intelligence – in his speech, but there was no comment during formal remarks regarding autonomous vehicles being assembled at the new plant.

While it wasn’t clear last August when the plant was announced why Toyota or Mazda needed another 150,000 units each of production, given relatively flat projections for U.S. auto sales over the next five years, since that time Toyota has pulled back on planned investment in Mexico.

In October, Toyota said it would halve the 200,000-unit planned capacity at its new Guanajuato, Mexico, plant, reducing its investment to $700 million from $1 billion. It already had announced it was switching output at the plant to the lower-volume Tacoma compact pickup from the Corolla compact car. The automaker has denied President Trump’s vociferous pro-U.S. manufacturing stance had any impact on its decision to roll back production for Mexico and build another plant in the U.S.

While December data has yet to be tallied, Toyota’s North American production was running 5.1% behind year-ago through November to 1.8 million, WardsAuto data shows. The company’s U.S. sales were flat last year, down 0.6% to 2.4 million.

Mazda’s output in Mexico – home to its sole North American plant – slipped 2.6% to 174,090 vehicles. Its U.S. sales fell 2.8% last year to 289,470.

[email protected]