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.
Volvo Cars selects South Carolina for its first American factory
(ROCKLEIGH, NJ – May 11, 2015) Volvo Cars has chosen Berkeley County, South Carolina as the location of its first American factory, investing up to $500 Million in a facility with a capacity to initially produce up to 100,000 cars per year.
The Berkeley County factory, located outside of Charleston, will make latest generation Volvo models for sale in the United States and for export. Construction will begin in early autumn 2015, with the first vehicles expected to roll off the assembly line in 2018.
Once completed, Volvo Cars will be able to manufacture vehicles on three continents, underscoring its position as a truly global car maker. It already operates two plants in Europe and two in China. The new US plant forms part of an ambitious medium term expansion plan to double global sales, boost market share and lift profitability.
“This new global industrial footprint and a complete product renewal forms the foundation for our growth and profitability targets,” said Håkan Samuelsson, president and chief executive of Volvo Car Corporation.
Volvo began importing cars to the US in 1955. With the development of an American factory, the company crosses an important threshold from an automotive importer to a domestic manufacturer.
“We’re excited to build our first American factory in South Carolina and we look forward to helping grow the local community and economy.” said Lex Kerssemakers, President and CEO of Volvo Cars of North America, “We were impressed with the friendliness, work ethic and passion of the people in the Charleston area.”
The decision to choose Berkeley County was taken as a result of its easy access to international ports and infrastructure, a well-trained labor force, attractive investment environment and experience in the high tech manufacturing sector.
Volvo Cars estimates that the factory will employ up to 2,000 people over the next decade and up to 4,000 people in the longer term. An economic impact analysis compiled by Dr. Frank Hefner at the College of Charleston estimates that, for an initial 2,000 direct jobs, more than 8,000 total jobs would be created as a result. The plant would contribute approximately $4.8 billion in total economic output on an annual basis.
“This is a landmark moment and truly a great day in South Carolina as we welcome Volvo Cars’ first American manufacturing plant to our state,” said Nikki Haley, Governor of South Carolina, “Volvo’s presence and commitment to the community will be felt for decades to come. We are proud to have this global leader in car manufacturing join and strengthen South Carolina’s automotive industry.”
readySC™, a division of the S.C. Technical College System, is assisting with the recruitment and training for positions at the new plant. All information on hiring will be posted as available at the readySC portal, readysc.org/volvo/. Potential suppliers or vendors interested in doing business with the company should contact the South Carolina Department of Commerce’s Buy South Carolina program by emailing firstname.lastname@example.org.
About Volvo Cars of North America
Volvo Cars of North America, LLC, (VCNA) is a subsidiary of Volvo Car Group of Gothenburg, Sweden. VCNA provides marketing, sales, parts, service, technology and training support to Volvo automobile retailers in the United States. For more information please refer to the VCNA media website at: http://www.media.volvocars.com/us.
Tom Burkart is the founder and managing editor of Car-Revs-Daily.com, an innovative and rapidly-expanding automotive news magazine.
He holds a Journalism JBA degree from the University of Wisconsin – Madison. Tom currently resides in Charleston, South Carolina with his two amazing dogs, Drake and Tank.
Mr. Burkart is available for all questions and concerns by email Tom(at)car-revs-daily.com.