Toyota and Mazda are close to naming the location for their future joint-venture plant.

Toyota and Mazda are reportedly zeroing in on a potential location for their upcoming joint-venture vehicle plant, with North Carolina and Alabama emerging as the front runners.The Japanese automakers were considering several U.S. states for the future location of the plant — with sites in Texas, Tennessee, Mississippi, Illinois and South Carolina previously on the table — but the list has been whittled down to just two. Toyota and Mazda will make a final decision sometime in early 2018, according to Automotive News.

The battle between North Carolina and Alabama for the joint-venture plant will likely come down to incentives. The companies are reportedly seeking an incentive package worth at least $1 billion. It could be worth the outlay to the winning state, however, with the automakers planning to spend $1.6 billion on the plant. The factory will also create an estimated 4,000 new jobs.

The plant is scheduled to begin vehicle production in 2021. It will build crossovers for Mazda and the Corolla compact for Toyota. The plant will initially have an annual capacity of 300,000 units.