Volvo to Build Next-Gen XC90 in U.S. in 2021

Volvo will build the next-generation XC90 SUV in 2021 at a plant under construction in South Carolina, the automaker announced today, increasing its investment to $1.1 billion.

Volvo was initially building a $500 million assembly plant near Charleston that is scheduled to open in the fall of 2018 and produce the S60, a sedan that is currently being built in China. The U.S. will become the sole global source of the S60 sedan when production in China is phased out in early 2019.

The plant was designed to accommodate a second vehicle. Now we know it is the XC90, a vehicle Motor Trend previously identified as the likely candidate for a number of reasons:

• The XC90 and S60 are on the same Scalable Platform Architecture which will make assembly easier.
• The XC90 was launched in 2015; by spring 2019 it will be the oldest vehicle in the lineup so the timing lines up.
• U.S. assembly makes sense given the popularity of large SUVs in North America. Volvo saw sales drop in the early months of the year because dealers could not get enough XC90s from Sweden to meet demand. The U.S. is the XC90’s biggest market.

Volvo broke ground on the new plant, known as “Volvo Project Thor,” in September 2015 about 40 miles west of Charleston. The 1,500-acre site will house the plant, a test track, training center and office building for 300 R&D, purchasing, quality, and sales staff.

Initially the Volvo plant will employ 2,000 workers who will make 60,000 S60 midsize sedans a year, half of them for export. There is plenty of land and the buildings are designed to increase capacity to 150,000 vehicles a year with the additional investment in equipment and another 1,900 employees.

“The plant in Charleston will serve both the US and international markets and forms a strong foundation for our future growth in the U.S. and globally,” said Håkan Samuelsson, Volvo president and chief executive.

Added Lex Kerssemakers, President and CEO of Volvo Cars USA, “Our business in the U.S. has been undergoing a transformation over the past two years and this is an important next step for our development here.”

South Carolina is already home to BMW in Spartanburg and the Mercedes-Benz Sprinter van plant. Stampings will come from supplier Gestamp, also in the area.

Volvo has two manufacturing plants in Europe, as well as two factories in China. A third Chinese plant is currently under construction.

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