Volvo’s recently announced plant in Ridgeville, South Carolina near Charleston will build the brand’s most popular cars in the U.S. The news comes from CEO of Volvo Cars of North America Lex Kerssemakers, who recently spoke with Automotive News about plans for the new plant, saying, “we will select a model that will be in the highest demand in the United States."

Volvo’s best sellers in the U.S. right now are the S60 sedan and XC60 crossover, but Kerssemakers went on to say that the upcoming XC90 SUV would not be built at the new plant.

Following the leads of Mercedes-Benz in Alabama and BMW in South Carolina, Volvo’s new southeastern plant represents a $500 million investment. Construction will begin in fall of 2015, and it should be online by 2018. The new plant will initially create 2,000 new jobs for the area, with that number increasing to 4,000 as production ramps up.

Volvo says the new factory will have a capacity of about 100,000 cars per year, and will be one of three in the world tooled to build cars based on Volvo’s Scalable Product Architecture. The company sold 56,366 units in the U.S. last year, but with 14 new vehicles coming over the next five years, Volvo is projecting a sharp increase in demand.

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Why it matters

Volvo’s owners at the Geely group are keen to position the company as a competitor to Audi, BMW and Mercedes-Benz, and are willing to invest the long-term capital to make that happen. But the new plant is still a relatively small investment compared to its would-be German rivals.

Factories in southern states have worked out well for German companies. Mercedes recently invested $2.4 billion into its Tuscaloosa, Alabama plant and hired 1,400 new employees. Production is expected to exceed 300,000 units by the end of 2015. BMW, meanwhile, expanded annual capacity at its Spartanburg, South Carolina plant from 350,000 to 450,000.

Volvo XC60

2015 Volvo XC60 - Driven High Resolution Exterior
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Read our full review here.

Volvo S60

2016 Volvo S60 Inscription High Resolution Exterior
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Read our full review here.

Source: Automotive News

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