Volvo hopes redesign of its flagship XC90 SUV will renew brand interest in the U.S., where the automaker says it’ll build a factory in South Carolina and begin production in 2018.(Photo: Volvo)
Swedish automaker Volvo announced yesterday morning that it will build its first U.S. factory near Charleston, S.C., spending $ 500,million on a plant with an initial capacity of 100,000 vehicles a year.
Volvo is owned by the Chinese company that makes Geely-brand cars, making the facility the first Chinese-owned auto assembly plant in the U.S. Geely already has factories in Sweden and China.
Volvo outlined the investment in March, but the location had been a topic of speculation. The Volvo plant will add to the auto industry’s growing presence in South Carolina, which also has BMW and Mercedes-Benz factories.
The Berkeley County Volvo factory will make the latest-design models for sale in the U.S., as well as cars for export. Volvo says it’ll begin building the plant this fall and expects to roll the first new Volvo off the line some time in 2018.
Karl Brauer, senior analyst at Kelley Blue Book’s KBB.com, notes that the move is especially significant because it’s the first time a Chinese auto company “has made a substantial investment in U.S. manufacturing infrastructure. It illustrates how critical the North American region continues to be, even with China’s ascension to the largest new-car market on the planet.”
Volvo says the new U.S. factory “forms part of an ambitious medium-term expansion plan to double global sales, boost market share and lift profitability”
“This new global industrial footprint and a complete product renewal forms the foundation for our growth and profitability targets,” said Håkan Samuelsson, CEO of Volvo Car.
The automaker once had a choke-hold on the safety image, but not as much so these days as other makers have become more aggressive about pitching their safety technology. Such features increasingly are expected in the U.S. and have been working their way down from luxury cars and trucks into sub-$ 30,000 vehicles.
Volvo — which is pursuing a plan to revive the brand with a new lineup of vehicles — sold 56,366 vehicles in the U.S. last year, down 7.9% in a total new-vehicle market up 5,9%, according to Autodata.
Volvo sales the first third of this year put it ahead of very few companies — and behind the likes of boutique, high-dollar brand Land Rover, according to Autodata.
The Volvo decision to koin BMW and Mercedes in South Carolina spotlights the success of Southern states in attracting auto factories, particularly foreign-owned, non-union plants.
Others:
•Alabama: Mercedes-Benz, Honda, Hyundai.
•Georgia: Kia, Porsche U.S. headquarters.
•Kentucky: General Motors, Ford, Toyota
•Mississippi: Toyota, Nissan.
•Tennessee: Nissan, Volkswagen, General Motors.
•Texas: General Motors, Toyota.
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