Volvo Cars plans to open its first plant in United States

The China Post - - WORLD BUSINESS - BY DEE-ANN DURBIN

Volvo Cars is plan­ning to build its first-ever U.S. as­sem­bly plant as part of a push to in­crease sales here.

The US$500 mil­lion plant will be Volvo’s first car plant in North Amer­ica.

The Swedish au­tomaker says it has a short list of pos­si­ble lo­ca­tions but didn’t re­veal them Mon­day. The com­pany is ex­pected to an­nounce the lo­ca­tion in the next few months.

Volvo has been owned by Chi­nese au­tomaker Geely Hold­ing since 2010. It cur­rently has two plants in Europe and two in China.

Volvo CEO Hakan Sa­muels­son said the de­ci­sion to open a U.S. plant high­lights Volvo’s long-term com­mit­ment to the U.S. mar­ket.

“Volvo Cars can­not claim to be a true global car maker with­out an industrial pres­ence in the U.S.,” Sa­muels­son said in a state­ment.

Volvo has sold cars in the U.S. since 1955, but the brand strug­gled af­ter its sale to Ford Mo­tor Co. in 1999. Its prod­ucts got old and couldn’t com­pete with newer ri­vals from Audi and oth- ers. Geely bought Volvo from Ford for US$1.8 bil­lion, a frac­tion of the US$6.4 bil­lion Ford had paid to ac­quire it.

Now, Volvo is hop­ing new ve­hi­cles — in­clud­ing the up­com­ing XC90 SUV, which goes on sale this sum­mer — and a big­ger man­u­fac­tur­ing foot­print will help it dou­ble its U.S. sales to 100,000 over the next few years.

Swe­den’s Volvo Group — the for­mer par­ent of Volvo Cars — al­ready has a man­u­fac­tur­ing pres­ence in the U.S. It makes trucks at a plant in Dublin, Vir­ginia, and en­gines in Hager­stown, Mary­land. It also has a U.S. head­quar­ters in North Carolina. But Volvo’s car di­vi­sion was sep­a­rated from that busi­ness when it was bought by Ford.

Mike Jack­son, the head of North Amer­i­can ve­hi­cle fore­cast­ing for the con­sult­ing firm IHS Au­to­mo­tive, said au­tomak­ers gen­er­ally want to build cars in the places where they sell them as a hedge against cur­rency fluc­tu­a­tions. Mercedes, BMW and Acura are among the other for­eign luxury brands that build ve­hi­cles in the U.S.

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