Toyota and rival Mazda are set to announce plans to build a $1.6 billion US factory as part of a new joint venture, according to a Reuters report quoting an anonymous source.

The report adds that the plant will have a capacity of 300,000 vehicles per year, divided between the two Japanese brands. It will employ about 4,000 people when it opens in 2021, the source revealed, adding that the plant’s location is yet to be determined. It is expected to produce the Toyota Corolla and a Mazda SUV.

Yesterday, Nikkei reported that Toyota would take around 5% stake in Mazda to develop key electric vehicle technologies and jointly build a factory in the US. The source who spoke to Reuters confirmed that the two Japanese players have future joint efforts on EVs. Toyota has also sold Mazda-based cars in the US before.

Toyota said in a statement that the two companies have been exploring various areas of collaboration under a May 2015 agreement. “We intend to submit a proposal to our board of directors today regarding the partnership with Mazda, however, we would like to refrain from providing further comment at this time,” the statement read.

Mazda said that “nothing has been decided yet” and that the company “will have a board meeting on this matter today. We cannot comment any further,” in a statement.

This development would be a boost to US president Donald Trump, who has chastised automakers setting up shop in neighbouring countries. Toyota was on the receiving end of one of Trump’s tweets for its plans to make the Corolla for the US market in Mexico. The compact model is currently made in Canada and in the US state of Mississippi.

No “big border tax” as threatened by Trump then, but this new US plant comes as demand for passenger cars has fallen sharply, with SUVs becoming more popular instead. Toyota’s US Corolla sales are down nearly nine percent this year.