Volvo To Build Cars In U.S.

Volvo has confirmed plans for a new vehicle assembly plant in the U.S. The Swedish automaker, owned by Chinese automaker Geely as well as the Chinese government, is committed to spending $500 million in the plant, which is expected to come online around 2018. A location is yet to be confirmed, with the automaker only stating it has drawn up a short list of potential locations. It was previously reported that Volvo has been in talks with several state governments including those of Kentucky, North Carolina and South Carolina about potential incentives.

ALSO SEE: Lincoln Continental Concept Debuts At The 2015 New York Auto Show

The latest decision underscores Volvo’s long term commitment to the U.S., which was once the automaker’s most significant market. Last year it accounted for just 12 percent of sales, or about 56,366 units. Volvo’s medium term target is 100,000 sales in the U.S. annually, which is roughly the number of sales the automaker enjoyed back in 2007.

Volvo already has two plants in Europe and two in China. However, building cars in even more regions will aid Volvo in hedging against currency fluctuations as well as benefiting from logistics and lower production costs. It’s a strategy rival firms such as BMW, Lexus and Mercedes-Benz have successfully undertaken.