Construction of the US$500 million ($633 million) plant will begin by November in Berkeley County, and when it is complete, the facility will have an annual production capacity of about 100,000 vehicles.
The South Carolina plant will become Volvo’s fifth across the globe, joining two in Europe (in Sweden and Belgium) and two more in China, and will employ up to 4000 people.
The Swedish car maker hasn’t announced what vehicles it will build at the plant, confirming only that they will be the “latest-generation Volvo models for sale in the United States and for export”.
The US plant is expected to specialise in production of Volvo’s larger passenger cars and SUVs including the S60 sedan and XC90 SUV, given the strong demand for those segments in the North American market.
Traditional Volvo rivals BMW, Infiniti, Lexus, Mercedes-Benz and Volkswagen all produce either a medium sedan and/or at least one SUV in the US, and all are continuing to expand their US manufacturing presence.
Volvo says the decision to choose Berkeley County was influenced by its easy access to international ports and infrastructure, its well-trained labour force, the region’s experience with high-tech manufacturing, and the fact that it’s an attractive investment environment.
The South Carolina plant forms part of Volvo’s ambitious medium-term plan to double global sales, boost its market share and increase profitability.
Senior vice president of Volvo Americas Lex Kerssenmakers said the brand has a goal of selling 100,000 vehicles in the US every year under the mid-term plan.
“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,” Kerssenmakers said.
Volvo Car Group sold a record 465,866 vehicles across almost 100 countries in 2014, up 8.9 per cent on the previous year, though its sales in the US dipped by about 8 per cent to approximately 56,000 last year.