Last month, the Japanese automotive manufacturers Toyota and Mazda announced plans to build a $1.6 billion joint-venture plant in Huntsville, Alabama, that will eventually employ about 4,000 people.
Several US states had been competing for the project, which will be able to turn out 300,000 vehicles per year; it will produce the Toyota Corolla for North America and a new small Mazda SUV.
Production is expected to begin by 2021; the new factory will also create ‘spin-off’ jobs at suppliers and service companies in the area.
To attract the plant, the state offered $370 million of tax abatements and investment rebates, according to Alabama Commerce Secretary Greg Canfield.
That figure does not include a package of local incentives that is still being finalised; the state will also provide workforce training.
Akio Toyoda, president of Toyota Motors, said that the company already has one plant in the state.
The new plant in Huntsville 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.
Toyota and Mazda have said that their collaboration will “respect mutual independence and equality”.
Toyota, which makes the Prius hybrid, Camry saloon and Lexus luxury models, already provides hybrid technology to Mazda, which makes compact cars for Toyota at its Mexico plant.
Financially, the partnership will boost cost-efficiency and economies of scale; it will also allow the companies to work together “on green and other automotive technology”, as the market addresses concerns about global warming, the environment and safety.
Alabama started on the road to becoming an automotive manufacturing hub in 1993, when Mercedes chose it as the location for a manufacturing plant after the state offered a $250 million incentive package.
Honda and Toyota followed by establishing engine plants in the state. In 2002, Hyundai announced an assembly facility in Montgomery.