Toyota, Mazda Narrow Plant Site Options in U.S.

Mazda and Toyota will build their jointly owned and operated U.S. assembly plant in Alabama or North Carolina, sources tell Bloomberg News.

The $1.6 billion factory will begin production in 2021 of Toyota Corolla sedans and a new Mazda crossover vehicle. The partners say the facility will create about 4,000 jobs and have the capacity to build 300,000 vehicles per year.

Bloomberg’s sources say the two carmakers also considered but have rejected locations in Illinois, Mississippi, South Carolina, Tennessee and Texas. The news service reported earlier that the partners were demanding at least $1 billion in tax breaks and other incentives.

The two companies announced plans in August for the U.S. plant, which will be Mazda’s first U.S. production facility. The complex is part of a broad alliance that will include joint development of safety, electric propulsion and connectivity technologies. As part of the partnership, Toyota is buying 5% of Mazda, and Mazda is acquiring 0.25% of Toyota.

Toyota had originally planned to make the Corollas at a $1 billion factory in Guanajuato, Mexico, and import them to the U.S. beginning in 2019.

That plan drew the ire of President Donald Trump, who threatened to impose import tariffs on the cars. Last month Toyota announced it was downsizing the Mexican factory project to $700 million and will use the facility to make Tacoma midsize pickup trucks for the North American market.