Volvo is focusing on its XC90 in the second half of this year.

After months of negotiations and speculation Volvo Car Group finally announced they will be opening their first North American factory in South Carolina by 2018. The decision to expand their production to American ground is a possible method of improving sales in the United States where numbers are constantly dropping.

The value of this investment is somewhere around the 500 million dollar mark and through the move the Swedish company hopes they will produce 100,000 vehicles a year and plans to employ 4000 people. The factory will be set up in Berkley County, close to the port city of Charleston. Volvo will be the second European carmaker to setup their factory in South Carolina after BMW decided to manufacture their sport cars in Spartanburg.

Volvo was sold to the Chinese billionaire Li Shufu in 2010 and since then the company changed its perspective and its way of business. The general plan is to increase sales with an aggressive approach and be as close to the competition like BMW and Mercedes whose profit and sales are three times bigger. Both competitors have had their factories in the USA since the ‘90s and theirs sales are going up annually.

In the words of Hakan Samuelsson, Chief Executive Officer of Volvo Cars “It was the total package: It’s logistics, it’s labor, it’s infrastructure, everything. It’s good to have other producers in the same state, as it’s good to have a supplier network.”

The start of the factories construction is set for autumn and it will supply both the American and international market.

Volvo’s investment program has expanded to 11 billion dollars and the first product of these investments will be revealed in the second half of the year in form of the SUV XC90. The chassis and all major parts that are used on this model will be the base for all cars in the company’s future.

Swedish executives based their strategy on BMW’s whose US factory builds almost all of their SUV’s and it is the biggest exporter of American made cars. Mercedes is also putting their effort in getting closer to BMW’s numbers with their factory in Alabama where all its SUV’s are made.

Just ten years ago Volvo’s sales in the USA were twice as high as they are today. With their production set in North America Volvo will definitely reduce their costs involving transport whilst also gaining a better perspective of the American market and how to attract buyers to pick their cars.

The US factory will be the fifth site globally for Volvo and it will help them reach their target of producing more than 800,000 cars by the end of this decade.