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Volvo plans rapid growth in U.S. with new factory

Automotive News Europe | May 29, 2015 11:05 CET

CHARLESTON, S. Carolina (Reuters) — Volvo aims to rebuild the brand’s U.S. sales to 100,000 vehicles a year “as soon as possible,” with help from a factory the company plans to open in 2018, its head of North American operations said.

Lex Kerssemakers, senior vice president of Volvo Americas and president and CEO of Volvo Cars of North America, said the automaker intends to quickly boost its U.S. annual sales from about 57,000 currently.

“Our dealers have been longing for cars and for sales for so many years,” Kerssemakers told Reuters at an event formalizing the company’s agreement to build the new factory in South Carolina.

In 2004, Volvo, now owned by Chinese parent, Zhejiang Geely Holding Group, sold 140,000 cars in the United States, he said.

Volvo’s effort to rebuild U.S. sales will hinge on the factory. Construction is expected to start this summer or fall with the help of more than $200 million in tax breaks and other incentives from state and local governments and other entities.

The vehicle produced in South Carolina will be a Volvo product, officials said, although it could one day build a Geely branded car as well.

The company is also developing plans with Geely in Sweden for a platform for smaller cars, Kerssemakers said.

Volvo’s plant will be built about 30 miles from the port of Charleston. The first car will roll out in 2018, officials said.

South Carolina provided Volvo with $150 million in infrastructure and other economic incentives, the state’s Secretary of Commerce, Bobby Hitt, told Reuters.

Volvo could get another $12 million in incentives from Berkeley County and up to $55 million in incentives from Santee Cooper power, officials said.

Volvo plans to offer a Chinese-made sedan in the United States, the Volvo S60 Inscription sedan, starting this summer, Volvo spokesman Dean Shaw said.

Only 2,000 2015 models will be sold in the U.S. with maybe more to follow in 2016, another Volvo spokesman, Jim Nichols, said.