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Toyota Motor Corp (7203.T) and Mazda Motor Corp (7261.T) confirmed Wednesday they will build a $1.6 billion joint venture assembly plant in Alabama that will employ up to 4,000 workers, a boost for President Donald Trump who wants automakers to expand U.S
Toyota President Akio Toyoda and Mazda President and Chief Executive Officer Masamichi Kogai were joining Alabama Governor Kay Ivey in Montgomery 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 plant in Huntsville.
Toyota plans to build Corolla cars at the plant, while Mazda will build crossover SUVs.
Alabama 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.
Huntsville Mayor Tommy Battle said the plant will “provide jobs for decades to come for Huntsville and Alabama. It vaults Alabama to the top as an industry leader in producing the next generation of cars that will power our nation.”
Among U.S. states, Alabama is already the fifth largest producer of cars and light trucks. The state has more than 150 major auto suppliers and 57,000 automotive manufacturing jobs.
Two decades ago, Alabama spent an estimated $250 million to woo Daimler AG’s Mercedes-Benz to put an auto plant in Tuscaloosa, sparking the birth of auto production in the state.
In September, Daimler said it would invest $1 billion to expand its Alabama Mercedes-Benz plant to start building electric sport-utility vehicles there from about 2020.
Alabama is also home to assembly plants operated by Honda Motor Co and Hyundai Motor Co. A Kia Motors Corp assembly plant operates near the Alabama border in Georgia.
Mazda and Toyota 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.