Swedish luxury automaker Volvo Cars, a wholly owned subsidiary of Chinese automaker Geely, has recently announced it has opted for a South Carolina location as the upcoming site for its new automotive plant – an investment worth $500 million.
The Swedish automaker has been losing ground in the increasingly competitive US premium market – the world’s biggest when it comes to the segment – and wants to recuperate the market share with locally produced models. Construction will start this year at the plant located in Berkeley County, with production planned for 2018 and an annual production capacity of 100,000 units. The Swedish brand, in deep trouble during the 2008-2009 financial crisis, was bought over from the second largest US automaker – Ford Motor – by China’s Geely back in 2010, with the parent company investing in its reconstruction ever since. Volvo Cars chief executive officer Hakan Samuelsson has said in related comments the new investment shows the brand’s commitment to the toughening US market.
Luxury rivals have also been stepping up their game, with numerous production commitments going lately towards Mexico, the country having the unique geostrategical position that allows it to tie North and South America. Additionally, it benefits from lower wages, an adversity towards unionization and easy access to both the US and numerous other export markets thanks to numerous free-trading agreements. In the US, Volvo sales have fallen last year by 8 percent to just 56,000 units while the overall market was on the rise, thus making the factory crucial to the mid-term goal of returning to deliveries of more than 100,000 vehicles annually.