Sweden's Volvo to build first car factory in US
TT/AFP/The Local · 30 Mar 2015, 15:57
Published: 30 Mar 2015 14:09 GMT+02:00
Updated: 30 Mar 2015 15:57 GMT+02:00
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The new factory will be Chinese-owned Volvo's fifth, and comes in the wake of a two-year turnaround of the Swedish brand's fortunes since it was sold by Ford in 2010.
"Volvo Cars cannot claim to be a true global car maker without an industrial presence in the US. Today, we became that," chief executive Håkan Samuelsson said in a statement.
The manufacturer said it has not decided on the location of the new plant, but said it would invest about $500 million (461 million euros) on the project, "underscoring its long term commitment to the US market."
The new factory will join existing plants in Sweden, Belgium, China and Malaysia.
Despite its presence in the US since 1955, Volvo is a small player in the country. Last year its US sales fell by 8 percent to 58,000 units -- representing a mere 0.4 percent of the market.
Following its sale to China's Geely five years ago, Volvo struggled to return to profits.
It recovered last year, however, selling 465,866 cars worldwide -- breaking a previous sales record from 2007 -- on the back of soaring sales in China, and strong activity in Europe.
The company appointed a new chief executive for North America in January, tasked with boosting sales to "over 100,000 cars in the medium term."
It also announced it would begin shipping a new S60 model produced in China to the US market in mid-2015.
The S60 will be built at a brand new factory in Chengdu that was developed to help launch the Volvo brand in the Chinese market.