Alabama has been putting wheels on the ground since the 1990s.
In 2024, Alabama’s automotive industry built 1.1 million vehicles and 1.8 million engines, driving a more than 3% increase in jobs over 2023, according to the Alabama Automotive Manufacturers Association. That effort accelerated a nearly $11 billion export value, the AAMA notes.
Automotive manufacturers must balance market demand, supply chain issues and workforce needs, all while focused on profitability. So how is Alabama’s auto manufacturing industry holding up against these challenges? And what sets it apart from other states?
Industry experts Ron Davis and Tom Shoupe offer their views. Davis is president of the AAMA and a former executive at General Motors, Federal-Mogul Powertrain and ZF. Shoupe, a former executive with Honda, is now an industry adviser to the AAMA.
On the competitive front, Alabama has several things going for it, Shoupe says: a solid foundation in auto manufacturing; an established supply chain to support that industry; and a collaborative environment focused on tackling shared challenges. Currently, Alabama has five original equipment manufacturers, or OEMs, including Honda, Hyundai, Mazda Toyota, Mercedes-Benz and Toyota, along with almost 180 suppliers.
“Never underestimate the strength of the foundation that’s been built here” is a point often voiced by Shoupe when he talks to various groups. “That is a great advantage. Part of that is having the track record of being able to do the work and to do it at a high level.” Alabama’s auto plants have shown that they can meet manufacturers’ requirements for volume, quality and costs, he explains, all contributors to long-term growth.
The development of a supply base in Alabama and the South generally is also key to manufacturing growth, Shoupe notes. Different regions where OEMs operate may share suppliers, with the South “a major contributor to that stability,” he adds.
Davis notes that OEMs have made “a huge commitment” to further localize their supply bases. Evidence of the growth announced at last fall’s Southern Automotive Conference, SAC for short, in Huntsville:
MOBIS Alabama, the largest Tier 1 supplier to Hyundai Motor Manufacturing Alabama and Kia Motor Manufacturing Georgia, is investing $52 million in its Montgomery facility.
Daewon America, which makes suspension bars and coils for the automotive industry (Hyundai, Kia and others), is investing more than $46 million in its Opelika plant.
Samkee Corp., based in South Korea, invested $128 million to build its first U.S. factory in Tuskegee. It will serve as a Tier 1 supplier to Hyundai’s assembly plant in Montgomery and is expected to bring more than 170 jobs to the state.
Another plus for Alabama’s auto industry is its willingness to collaborate with each other for the public good, Shoupe says. “People are more than willing to pitch in with ideas and suggestions. And they’re willing to get on committees to help solve problems that are collective problems,” he explains.
He credits Davis’ leadership and the AAMA with spearheading this collaborative approach to Alabama’s auto industry, but notes that the group’s influence extends to the entire Southeast region.
Workforce development is an example of this collaborative spirit, so much so that it took up much of the agenda at the SAC. The annual conference attracts attendees from across the country, with participants from OEMs, suppliers and more. The AAMA hosted the Huntsville event.
To develop workforce solutions for the industry, the association is working with local and state government agencies, manufacturers, educational institutions and employment firms, Shoupe says. To attract new employees and keep current ones, discussions have focused on practical solutions like adding on-site daycare to work sites to ease employees’ childcare worries.
To that end, Toyota Motor is opening a new childcare center this year adjacent to its plant in Huntsville, according to President Marc Perry, speaking during the AAMA’s Annual Appreciation Dinner in November 2025. The facility will care for more than 270 children across two shifts, Perry says.
Another vexing issue is how to shore up fundamental skills like reading, writing and math for those wishing to land a core job (i.e., those actually building the car) in the auto industry, Shoupe notes. In addition, workforce participation skills like work ethic, responsibility, reliable attendance and the ability to think and learn are also key focus areas for OEMs, he says.
“I think most OEMs [will say], if you can give me people that can come to work regularly and they want to think and learn, we can teach them what they need to know,” Shoupe explains. “We can make them into a welder. We can make them into whatever we need them to be. But it’s not possible without having [those] basic fundamental requirements.”
Toyota is supporting fundamental skills important to the auto-making industry as it announced last year. It has pledged STEM education grants up to $11 million for Huntsville City Schools, Perry says. Through its Driving Possibilities initiative, Toyota will help prepare pre-K-12 students for future careers in science, technology, engineering and math. The program will be implemented over five years in select schools, according to Toyota.
In addition, Alabama has invested in next-generation skills training with construction of the new EV Technology Center at Alabama Robotics Technology Park in Tanner, near Decatur, notes the AAMA. The center will help ready Alabama’s automotive workforce for a rapidly changing industry.
Tariffs, Transition and Trends
Along with building a skilled workforce, OEMs must keep tariffs top of mind to stay competitive, no small feat with the Trump administration’s policies in flux.
Tariffs can compel OEMs to review their production lineups and make adjustments if needed, Shoupe explains. They must decide the best location to build their models given the tariff situation, especially among Canada, the United States and Mexico, he says. “There are so many supplies that are dispersed among those three countries.”
OEMs also must pay attention to the effect of tariffs on equipment and tooling, which are often being upgraded, he says.
The key point, Shoupe explains, is for OEMs to keep track of tariff changes so that they can have “more certainty in planning.”
OEMs also are in a product transition phase, say Shoupe and Davis. They are reworking their strategies and product lineups given the shift in the electric vehicle market and EV sales, Shoupe explains.
General Motors, for example, reported that in fourth quarter 2025, its EV sales fell 43%, to 25,219 vehicles. “If you look at GM and Ford, they’re taking these huge charges to offset the EV business. And they’re having to recover that somehow,” Shoupe says, with cost competitiveness and profitability the major concerns.
The market’s shift away from EVs is propelling makers overall, not just in the Southeast, to consider other powertrain options like hybrids and combustion engines, he notes. The EV market isn’t dead, but it will require improvements in infrastructure and other aspects of the EV supply chain, Shoupe predicts.
Another manufacturing trend, says Davis, is improving the efficiency of powertrains using turbo technology.
Whatever the technology — the use of robots, more computer-controlled equipment and the rise of AI — automakers will need a highly trained workforce, Shoupe notes, especially with OEMs announcing additional investments.
“The most important thing is, they’re all totally committed to the Southeast region and North American production and the growth of that.”
With its three decades of experience, Alabama’s auto-making industry is geared up for the next mile and beyond.
Nancy Randall is a Tuscaloosa-based freelance contributor to Business Alabama.
This article appears in the March 2026 issue of Business Alabama.
