Volvo Cars Plans Its First U.S. Auto Plant in South Carolina

Volvo Cars Plans Its First U.S. Auto Plant in South Carolina

A Volvo XC90 automobile, produced by Volvo Car Group, sits on display at the Paris Motor Show in Paris on Oct. 2, 2014.

May 11--Volvo Cars said today it will invest $500 million to build a new plant in Berkeley County, S.C., as industry sales in North America continue to increase.

The automaker, which is owed by Zhejiang Geely Holdings of China, said the investment will create 2,000 jobs and the plant will initially be able to produce up to 100,000 cars per year.

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

The automaker said the new plant is part of its plan to double global sales, boost market share and lift profitability.

Volvo was purchased by Geely from Ford in 2010.

"This new global industrial footprint and a complete product renewal forms the foundation for our growth and profitability targets," said HÃ¥kan Samuelsson, president and chief executive of Volvo Car Corporation. While Volvo has been selling cars in the U.S. since 1955, the plant, near Charleston, will be the first U.S. plant for the Swedish brand.

Automakers are on pace to sell nearly 17 million new cars and trucks this year, the most since before the Great Recession. As industry sales have rebounded automakers have invested heavily in both the U.S. and Mexico to boost production.

Attempts to lure Volvo came down to two states -- Georgia and South Carolina -- last month, with both states filing for environmental permits with the Army Corps of Engineers, according to the Charleston Post and Courier.

Volvo said it picked South Carolina because of its easy access to international ports and infrastructure, a well-trained labor force, attractive investment environment and experience in the high tech manufacturing sector.

It also is a major win for South Carolina Gov. Nikki Haley, who has taken a hard line against unions, and is the second major automotive investment the state has snagged this year.

In March, Mercedes-Benz said it plans to spend $500 million to build a new plant in Charleston, S.C., so it can assemble its next-generation Sprinter commercial van there.

"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," Haley said in a statement. "Volvo's presence and commitment to the community will be felt for decades to come."