There are numerous factors that triggered Volvo’s decision to invest half a billion dollars to establish a manufacturing base in the United States, in South Carolina.
The location is ideal for export, it could also serve as a beachhead for American production of Chinese cars for the automaker’s parent company Geely – which has long envisioned its expansion to the US and numerous other factors influenced Volvo Cars’ decision. And most likely, the crucial element for the Swedish premium brand is the desire to revive their once-top position across the US car market in a bid to rekindle the declining sales seen over the past few years. That’s why the automaker and its Chinese partner opted for the more labor expensive US instead of establishing the manufacture location in Mexico – as most other car brands have been doing in the recent past.
Lex Kerssemakers, senior vice president of Volvo Americas, has explained the reasoning behind the decision to start construction on a $500-million factory in Berkeley County, where it should churn out 100,000 autos annually since 2018. “We have been very silent,” comments Kerssemakers. “But we decided that we will focus on the United States, or we are not a global company. It’s time to go back,” he added, as the sales of Volvo cars have dropped 8 percent last year to around 56,000 vehicles. The company is also looking to attract buyers by delivering on the US market the Chinese-specific S60L model, a longer-wheelbase variant of the S60 midsize model that can accommodate better the persons sitting in the back.