STOCKHOLM — Volvo Cars is doubling investment in its first U.S. plant under construction to add a second production line at a total cost of $1 billion, a source with knowledge of the plans said, as the carmaker heads for a fourth straight year of record sales.
The move to raise capacity even before completion of the plant in Charleston, South Carolina, will ultimately add 2,500 workers to the 2,000 already being recruited by the Swedish carmaker ahead of its 2018 opening, the source told Reuters.
A Volvo spokeswoman declined to comment. The increased investment was first reported by the Charleston-based Post and Courier newspaper.
The Charleston plant expansion is a vote of confidence in Volvo's sales momentum, buoyed by a revamped lineup led by the flagship XC90 SUV, even as U.S. auto market growth tails off. Volvo's U.S. sales are off 7.2 percent so far this year, but they are up by 8.7 percent overall globally. Volvo has blamed supply shortages for the dip in U.S. deliveries but vowed to reach a new global sales record.
Under the ownership of Chinese carmaker Geely's unlisted parent company, Zhejiang Geely Holding Group, Volvo has recovered from a sales slump in its final years under previous owner Ford and is now challenging larger premium rivals such as BMW and Mercedes-Benz.
Volvo is one of Sweden's largest companies by revenue.
Reporting by Niklas Pollard and Johannes Hellstrom.