Volvo to build first US car plant for $500-mn

Swedish automaker Volvo Cars said yesterday it will build its first US car manufacturing facility at a cost of about $500 million, six decades after Volvo cars were first imported in the country.

The new plant will be constructed near Charleston in South Carolina and will have an initial annual capacity of 100,000 vehicles.

The Berkeley County factory will make latest generation Volvo models for sale in the US and for export.

Construction is expected to begin in early autumn 2015, with the first vehicles expected to roll off the assembly line in 2018.

Volvo Cars president and chief executive officer Hakan Samuelsson said in a statement: ''This new global industrial footprint and a complete product renewal, forms the foundation for our growth and profitability targets.''

It is expected that the new car plant will provide direct employment to about 2,000 and over 8,000 other jobs over the next decade and contribute approximately $4.8 billion in annual economic output.

''This is a landmark moment and truly a great day in South Carolina as we welcome Volvo Cars' first American manufacturing plant to our state,'' said Nikki Haley, governor of South Carolina,

''We are proud to have this global leader in car manufacturing join and strengthen South Carolina's automotive industry,'' Haley further stated.

Although Volvo's plans to build its first car plant in the US was known for some time, the final location has been revealed only yesterday.

Berkeley was chosen based on 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 said.

Gothenburg, Sweden-based Volvo is owned by Chinese automaker Zejiang Geely, which acquired the European automaker from the US giant Ford Motor Co in 2010 through a $1.5-billion deal.

With the new plant, Volvo which began importing cars to the US in 1955 will turn into a domestic manufacturer from an automobile importer. The carmaker has manufacturing facilities in Sweden as well as in China.

 In 2014, Volvo sold 56,366 vehicles in the US, down 7.9 per cent compared with the previous year.

Overall, the new-vehicle market in the US saw a 5.9-per cent growth at 16.5 million vehicles, the highest number since the 2006 record of 16.94 million, according to Autodata.

According to analysts, the growth was primarily driven by a rebound in economy, improved consumer sentiment and fall in fuel prices.