Volvo’s->ke188 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->ke142 and XC60 crossover,->ke288 but Kerssemakers went on to say that the upcoming XC90 SUV->ke145 would not be built at the new plant.
Following the leads of Mercedes-Benz->ke187 in Alabama and BMW->ke178 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.
Continue reading for the full story.
Why it matters
Volvo’s owners at the Geely->ke3815 group are keen to position the company as a competitor to Audi,->ke14 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
Read our full review here.
Volvo S60
Read our full review here.