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March 31, 2015

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Volvo’s US plant ‘last piece’ globally

VOLVO Cars will invest US$500 million in its first US assembly plant under plans unveiled yesterday, plugging a longstanding gap in the Swedish carmaker’s manufacturing base as it pursues a global comeback under Chinese ownership.

Volvo is in advanced talks with several US states and will announce a location within weeks, Chief Executive Hakan Samuelsson said. Production will begin in 2018.

Following its sale to Zhejiang Geely by Ford in 2010, Volvo has stepped up investment in new models and production, adding a pair of Chinese factories to its two older European plants.

North American manufacturing is “the last piece in establishing our global footprint,” Samuelsson said.

The plant will serve export markets and the US, where Volvo is aiming for a return to annual sales of 100,000 vehicles.

While the carmaker’s global deliveries rose 9 percent last year to almost 466,000, thanks to China, US sales fell another 8 percent to 56,000 vehicles.

The choice of the US over Mexico — where rivals such as BMW have announced plant investments — underlines Volvo’s determination to “rebuild the brand” among American consumers, the CEO said. “We want to give a clear signal that the US is a home market for us.”

He declined to identify the shortlisted sites but said the decision would reflect the availability and cost of skilled workers and logistics including the export of finished cars.

Samuelsson said he was neutral on whether US staff are represented by the United Auto Workers union — a politically divisive issue that has dogged plant decisions by Volkswagen and others.

Volvo said production capacity would be close to the 120,000 vehicles at its larger Chinese plant, with model plans still under wraps.




 

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