Sweden’s Volvo Cars, owned by China’s Zhejiang Geely, has announced it plans to spend $500 million to build its first US vehicle assembly facility, in an investment plan that seeks to amend a longstanding issue with the automaker’s global manufacturing base.
The Swedish premium automaker is currently envisioning a global sales comeback under its new Chinese ownership, with Geely taking the reigns from Ford back in 2010 and stepping up investment and development efforts. The company has already added a couple of Chinese plants to support production coming from its two older European factories. Now, the Volvo chief executive officer Hakan Samuelsson said Volvo is in advanced negotiations with certain US states – with the final production location to be known in the coming weeks and the production start scheduled for 2018. Samuelsson said North American production would be “the last piece in establishing our global footprint.”
The factory is tasked to support both local sales, where Volvo seeks to return to previous levels of sales that saw deliveries cross the 100,000 units mark each year, and also serve export markets in the Americas and overseas. Meanwhile, the carmaker’s worldwide sales last year soared 9 percent to 466,000 units on the growing demand in China, the US figures were still negative, dropping 8 percent to 56,000 autos. The CEO added that Volvo chose to build its plant in the US, not in Mexico – where global premium automakers have lately announced numerous investments – is a statement to the company’s desire to rebuild the brand among American buyers.