Recent reports have pointed that car manufacturer Toyota will build its Corolla cars in its Alabama facility. This was refuted on Wednesday when the Japanese car giant announced that the assembly plant in Alabama would instead produce its new line of sports utility vehicles or SUV.
The Alabama facility costs $1.6 billion to put up, and it is a joint venture between Toyota and fellow Japanese car manufacturer Mazda. The joint venture was launched in January 2018, and it will go into production starting in 2021. The plant has an expected production capacity of 300,000 cars annually. The new plant is a 2,500-acre sprawl that is located about 14 miles from Toyota's engine plant in Huntsville, Alabama.
Despite being one of the most iconic cars in history, the Toyota Corolla has fallen from the public taste for quite a number of years now. Sales of the iconic car fell by as much as 5 percent during the first six months of this year. Toyota reported that only 152,868 Corolla's were sold during that period. The company added that its total car sales during the same period have fallen by 8 percent. In its U.S. operation, Toyota's SUV sales only fell 1 percent.
Cars and sedans have fallen in the United States for quite some time now. This is true for all car manufacturers, not only Toyota. The growing interest towards crossovers, SUVs, and pickup trucks mean a dip in sales for the car and sedan niche.
Moreover, the overall auto sales in the United States have declined. The fact that car manufacturers continue to build new plants in the county has some serious ramifications and could cause overcapacity. This means that in order to reach sales quotas, car manufacturers might end up dropping the price of their products.
As for the Corolla, the car's production will be shifted towards Toyota's Mississippi plant. There are only two facilities in the world that produces Corollas: one is in Mississippi, the other one is in Japan.
Of all the states, Alabama sits as the fifth largest producer of cars and light trucks. The state boasts more than 150 major auto suppliers, and the industry provides more than 57,000 manufacturing jobs. One can say that auto manufacturing is one of the biggest industry in the state.
While some car manufacturers are looking to shift their production facility towards less expensive countries, Toyota stays faithful to its U.S. operations.