Volvo just recently announced its intentions to build its first-ever U.S. production facility, and the Swedish automaker has just announced that the plant will be in South Carolina. The plant will be in Berkeley County, just north of Charleston, and while no exact location was revealed, the facility will most likely be located along the western edge of the county, close to Interstate 26.

Construction will begin this fall, with cars rolling off the assembly line by 2018, but Volvo has not said which product (or products) it plans to build in South Carolina. The best bet would be the popular S60 or one of the two crossovers that Volvo offers. When the plant goes online, Volvo says that it will initially have the capacity to build about 100,000 units each year, including those for export.

There is no word as to how many people the plant will initially employ, but Volvo has a “longer term” plan to employ 4,000 people. Add in the additional five to seven jobs that Volvo says will be created outside the plant by outside companies and suppliers, and South Carolina’s employment rate will probably see a pleasant spike over the next several years.

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Why it matters

The new plant will be part of a $500 million investment with a “medium term” goal of selling 100,000 vehicles in the U.S., which is part of a broader plan to double global sales. This will mark Volvo’s fifth assembly plant, with two currently operating in Europe and two more in China.

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Press Release

Volvo Cars, the premium car maker, has chosen South Carolina as the location of its new USD500m factory, highlighting the attraction of the United States as a location for high technology manufacturing and providing a significant boost to South Carolina’s economy.

The new facility will have initial annual production of around 100,000 cars and be located in Berkeley County, close to Charleston.

It will make latest generation Volvo models for sale in the United States and for export. Construction will begin in early autumn 2015, with the first vehicles expected to roll off the assembly line in 2018.

Once completed, Volvo will be able to manufacture cars on three continents, underscoring its position as a truly global car maker. It already operates two plants in Europe and two in China.

The new US plant 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, president and chief executive.

An important factor in Volvo Cars’ renaissance will be the US market. Volvo Cars has been doing business in the US since 1955 and has a medium term target to sell at least 100,000 cars a year.

“Building a plant in the US is a reflection of Volvo Cars’ commitment to the US and the key role the US plays in our growth objectives,” said Lex Kerssemakers, senior vice president Americas.

The decision to choose Berkeley County was taken as a result of its easy access to international ports and infrastructure, a well-trained labour force, attractive investment environment and experience in the high tech manufacturing sector.

Volvo Cars estimates that the plant will employ up to 4,000 people in the longer term. It has been estimated that the multiplier effect of a car plant means that it can create between 5 and 7 new jobs for every job at a plant. On top of that, factories have beneficial effects on many more aspects of the local economy, from taxation income to consumer spending.

“The US remains one of the most dynamic economies in the world and Volvo Cars believes strongly in the benefits of investing and contributing to the markets in which it seeks to sell cars,” said Mr Kerssemakers.

Nikki Haley, Governor of South Carolina, said: “By bringing $500 million in new investment and 4,000 jobs to this community, Volvo’s presence and commitment to Berkeley County and the state will be felt for decades to come. We are proud to have this global leader in car manufacturing join and strengthen South Carolina’s automotive industry.”

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