Volvo made its big factory announcement this morning — right in my backyard! Yes, Volvo is coming to Charleston to be closer to car-revs-daily!?
Just kidding. Volvo chose this Southeastern Atlantic state for a number of reasons — all related to the firm’s ambitious goal of making up to 200,000 cars a year here by around 2020.
The first Volvo plant anywhere in North America, Volvo is clearly seeking the strategic and financial advantages that come with building its cars close to their intended market.
Why South Carolina?
Every state is willing to kick big tax incentives to manufacturers these days, with Georgia also in the final running for the Volvo project. South Carolina is no different in that regard, with the Berkeley County Volvo plant set to receive generous incentives for decades to come. That is just a cost of doing business.
But there are other huge reasons at play, not least is that South Carolina is a so-called ‘right to work’ state. This labor plan makes unionization less formal and shelters big factory operators from a spike in salaries that can come from a UAW-brokered nightmare.
The third reason is that Charleston and its surrounding areas are a bit of a Euro tech hub. Continental and Michelin tires both have their US headquarters and manufacturing hubs in SC, and Daimler is expanding a Mercedes-Benz Vans factory just north of the city by about 6X this year. BMW is the most well-known global success story for the region via its plant in Greer near Spartanburg. Boeing is also a major employer in the Charleston area thanks to its 787 Dreamliner facility, which itself is doubling in size this year.
These companies all benefit from a fairly skilled labor force, flexible local governments eager for the jobs and investment, and world-class infrastructure.
The Charleston seaport is a powerhouse that is exporting almost 1000 BMW SUVs every day, and importing a similar payload of parts and equipment. The port will soon be deepened five feet from its current levels — helping to welcome some of the largest cargo ships in the world comfortably.
What Volvo Models Will Be Made Here?
There has been no production announcement so far. This is a green-field site for the factory, meaning hundreds of acres of terrain will be customized for the facility.
The most likely vehicle to be built stateside are the XC SUVs, with the XC90 and XC60 looking like prime candidates for USA assembly. Close to their biggest market in America, plus able to use imported sub-assemblies from Sweden (or China) as needed, and easily exported again around the world — the XC90 would be the most likely
Overall, great news for Volvo owners and fans worldwide. Production of 100,000 vehicles annually is set to begin in 2018, with an eye to doubling that level within a few years via expanded production lines.