Swedish car company will join BMW and Mercedes-Benz as auto makers with plants in South Carolina.
The state of South Carolina is growing as an automotive manufacturing cluster. On Monday, Volvo Cars announced it will invest $500 million to build its first U.S. factory outside of Charleston and listed the nearby port and the state’s overall infrastructure as a factor in its decision.
Construction is scheduled to begin early this fall and be completed in 2018.
Initial production capacity for the facility will be 100,000 units, which will be sold domestically and overseas. Volvo has yet to decide which models it will produce in Berkeley County and, therefore, doesn’t know what the mix of domestic sales to exports will be, spokesman Jim Nichols said.
All vehicles will be produced on the company’s new scalable product architecture. The X-90 SUV is the first car being built on that platform.
Volvo typically tries to source materials and components from local regions and countries where assembly lines are located and will leverage the global footprint of its suppliers, Nichols said. Where suppliers and parts are located will determine how many inputs will need to be imported through the Port of Charleston.
Owned by Chinese auto maker Zhejiang Geely Holding, Volvo has two plants in Europe and two in China. The new U.S. assembly line is part of a medium-term expansion plan aimed at doubling global sales, boosting market share and increasing profitability.
Volvo estimates the factory will employ up to 2,000 people over the next decade, and as many as 4,000 people beyond that.
The Swedish car maker noted it was attracted to South Carolina by the skilled workforce, investment climate and experience in high-tech manufacturing. South Carolina is providing about $150 million in incentives to Volvo in the form of infrastructure improvements, including site preparation, roads, and related environmental litigation. The infrastructure will support development of 6,800 acres, which will be available for suppliers and other industries, according to Commerce Department spokesperson Allison Skipper.
Volvo will only occupy 2,900 acres at the project site.
The state will issue about $120 million in economic development bonds to help fund its portion of the project.
“Volvo Cars’ announcement is tremendous for our port and state, and the South Carolina Ports Authority is proud to be an integral part of their decision to locate in South Carolina. Proximity to a port is critical to automotive manufacturing, and we are a proven leader in the automotive sector on the East Coast,” said CEO Jim Newsome.
BMW has been producing several vehicle models in Spartanburg since 1994. It has 270 North American suppliers, 40 of which are in South Carolina. It also is a heavy importer of material through the Port of Charleston, with containers transported by rail to the South Carolina inland port in Greer, and an exporter of finished vehicles.
Mercedes-Benz operates a commercial van assembly plant in Ladson, near Charleston, that puts together finished sections of vehicles imported from Europe. The auto maker recently announced it plans to upgrade the facility to a full manufacturing plant. Read more about Mercedes’ supply chain strategy for Sprinter vans in North America in the May American Shipper feature, “Mercedes to build vans in S.C.“
South Carolina is also home to several tire manufacturing plants.
Volvo to build plant near Port of Charleston
