Volvo Cars plans U.S. plant expansion and boost investment twice

Volvo XC40

Volvo Cars is increasing its investment twice in its first U.S. plant under construction to include a second production line at an overall cost of $1 billion, a source with understanding of the plans stated, as the automaker heads for a 4th straight year of record sales.

The move to raise capacity even prior the completion of the plant in Charleston, South Carolina will ultimately add 2,500 employees to the 2,000 already being hired by the Swedish carmaker ahead of its 2018 opening, the source informed Reuters.

A Volvo spokesperson refused to comment. The increased investment was first reported by the Charleston-based Post and Courier newspaper.

The Charleston plant growth is a vote of confidence in Volvo’s sales momentum, buoyed by a modified lineup led by the flagship XC90 SUV.

Under the ownership of Chinese automaker Geely’s unlisted parent company, Zhejiang Geely Holding, Volvo has recovered from a sales downturn in its last years under previous owner Ford and is now challenging larger premium competitors such as BMW and Mercedes-Benz.

The company, among Sweden’s biggest by revenue, has blamed supply shortages for a 7 percent drop in U.S. deliveries so far this year and promised to attain year-on-year sales growth for 2017 as a whole, together with a new international record.

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