The joint-venture auto plant project between Mazda and Toyota is bringing a wave of supply chain investment to northern Alabama.
Since the $1.6 billion auto plant was announced for Huntsville in 2018, several suppliers — many of them with Japanese roots — have announced their own projects in the vicinity. Five of them represent $440 million in capital investment around Huntsville, according to the Alabama Department of Commerce.
“You’re starting to see Mazda come in and they need a supplier base,” said Brooks Kracke, president of the North Alabama Industrial Development Association.
Mazda Toyota Manufacturing USA is on schedule to be up and running in 2021, producing 150,000 vehicles each of a new Mazda crossover and a new, unannounced Toyota SUV.
Japanese-based DaikyoNishikawa was among the first new manufacturers to come to the project, launching construction of a $110 million plant in Huntsville this summer. The company supplies plastic interior, exterior and engine parts to major automakers in Japan, but the Huntsville plant will be its first in the United States, and its first to supply Toyota. It already has production sites in Mexico, Thailand, Indonesia and China.
The second new supplier to arrive was YKTA, a joint venture of three Japanese auto suppliers: Y-tec, Keylex and Toyotetsu. YKTA announced in May it will create 650 jobs with its $220 million investment in Huntsville, its first move as a company that was created specifically to support Mazda-Toyota.
“This allows immediate delivery of our product to MTMUS and reduces inventory and logistics costs,” Jackie Hogan, YKTA VP of administration, said in a statement to Automotive News.
Y-tec and Keylex already supply Mazda independently, while Toyotetsu’s primary automotive customer is Toyota. Toyotetsu has been operating in North America for over two decades, while Y-tec and Keylex have a joint venture in Mexico that supplies Mazda’s plant there. The three-way joint venture will supply chassis and structural metal components to MTMUS.
“With the Mazda-Toyota joint venture, we needed that expertise,” Hogan said. “It would have been very difficult for one of the companies to try to go in and fulfill the needs of Mazda-Toyota without the other two.”
Seating supplier Toyota Boshoku announced plans for a plant near Huntsville, operating as Toyota Boshoku AKI USA, a newly established joint venture between Toyota Boshoku America and AKI USA Corp., itself a U.S. joint venture between two Mazda suppliers: Delta Kogyo and Toyo Seat.
That $50 million investment will yield a plant in nearby Athens, Ala.
“The joint venture between Toyota and Mazda provided us an opportunity to pursue a partnership for seat manufacturing as well,” the company said in a statement.
Sanoh America, a supplier of metal and plastic tubing chassis parts, and brazed products for engine applications, will create a manufacturing site in Huntsville. The company already has 10 manufacturing plants throughout North America.
Vuteq, a supplier focused on interior and exterior plastic-injected parts and various subassemblies for Mazda and Toyota, committed to a more than $60 million investment near the Mazda-Toyota campus in August. Construction is expected to begin in October.
Toyota already has a number of key suppliers around Huntsville — in Tennessee, Mississippi and Alabama. Mark Brazeal, vice president of administration overseeing administrative operations for the Mazda-Toyota venture, said the new project needs other suppliers to operate close by.
“As we have suppliers locate on site or near site, we can really reduce that lead time for parts delivery,” Brazeal said.
Steve Sewell, executive vice president of the Economic Development Partnership of Alabama, predicted the Mazda-Toyota project will be attracting more investment.
“This is just the beginning,” Sewell said. “As they develop their supply chain and make decisions about the supply chain, then certainly we expect that there will be more activity.”