Published By : 12 May 2015 |Published By : QYRESEARCH
Volvo Car Corp has decided on setting up a US$500 million worth of business at South Carolina. This will be the very first American plant that the company would be setting up in North America’s premium car market. The primary rationale is to acquire a greater share in this competitive market. In 2015 itself the plant will be made operational and the factory is situated in the area of Berkeley County.
The main production of cars will start only in 2018 and is expected to reach a production capacity of 10000 cars a year. This investment happens to be a part of the Geely business in China wherein this company purchased Volvo from another car producer, Ford back in 2010 in order to rebuild and reconstruct a brand which faced challenges because of the global financial meltdown.
A senior official at Volvo expressed that this in a way showed that the company stays strongly committed towards reviving the car business in America. This development in a way has also coincided with the difficult and stiff competition that exists in the luxury car industry in North America. There are many rival and competitors of Volvo that are trying their level best to enhance the production capacities with the market being characterized by greater preference for Mexico.
Greater preference for Mexico can be attributed to non-unionized labor, low wage rate, and also the access that this region has to several vital export markets and most importantly America. Market trends point to the fact that the production capacity in North America is anticipated to increase by greater than 10% in the forthcoming years to almost 20% by 2020.