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Toyota, Mazda confirm $1.6 billion plant for Alabama

Reuters  |  MONTGOMERY, Alabama 

By David Shepardson

MONTGOMERY, (Reuters) - Motor Corp <7203.T> and Motor Corp <7261.T> confirmed Wednesday they will build a $1.6 billion joint venture assembly in that will employ up to 4,000 workers, a boost for who wants automakers to expand U.S. production.

and and Chief Executive Officer were joining in at an event to confirm the decision, the companies said.

The plant, which will produce 300,000 vehicles a year, is set to open on a 2,500-acre site in 2021 about 14 miles from Toyota's engine in

plans to build cars at the plant, while will build crossover SUVs.

is providing tax incentives, the total of which was not immediately known. A person briefed on the matter said it was expected to be close to $1 billion over several years.

said the will "provide jobs for decades to come for and It vaults to the top as an industry leader in producing the next generation of cars that will power our nation."

Among U.S. states, is already the fifth largest of cars and light trucks. The state has more than 150 major auto suppliers and 57,000

Two decades ago, spent an estimated $250 million to woo to put an auto in Tuscaloosa, sparking the birth of auto production in the state.

In September, Daimler said it would invest $1 billion to expand its to start building electric sport-utility vehicles there from about 2020.

is also home to assembly plants operated by <7267.T> and <005380.KS>. A <000270.KS> assembly operates near the border in

and said they still need approvals and authorization by antitrust agencies for the new joint venture. They announced a capital alliance in August and plans to jointly develop technology for electric vehicles.

Trump tweeted in March he wanted "new plants to be built here for cars sold here." Many automakers have announced expansions of facilities or new jobs but no other new U.S. auto plants have been announced.

U.S. auto industry sales have been declining, and there is some concern that the new could exacerbate overcapacity and pressure vehicle prices. U.S. new vehicle sales fell 2 percent in 2017, after hitting an all-time record high in 2016. Sales are expected to fall further in 2018.

A year ago, President-elect Trump criticized and threatened hefty tariffs against the Japanese automaker if it built its sedan for the U.S. market in

and announced plans for a new in August. said it would shift production of Corollas from to the new venture rather than in Guanajuato, and would build pickups in instead.

In October, said it would scale back investment in a planned in by 30 percent to $700 million and cut planned annual capacity in half to 100,000 vehicles as it shuffles its production plans to meet market demands.

Over the last 30 years Toyota, along with German and other Asian automakers, has built a second auto industry in the whose size and employment rivals operations of the Three automakers, but with newer plants and fewer unionized workers.

States covet auto assembly plants because they typically pay above-average wages and spin off jobs at suppliers and service companies. states have been home to the majority of new auto production by German and Asian automakers. These states generally enjoy good transportation infrastructure, business-friendly regulators and generally anti-union politicians.

(Reporting by David Shepardson; additional reporting by Bernie Woodall; Editing by David Gregorio)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 11 2018. 01:33 IST