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  March 31st, 2015 | Written by

Volvo to Open Manufacturing Facility in United States

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Volvo Car Group has unveiled plans to invest $500 million in its first auto manufacturing factory in the U.S. The company has reportedly narrowed its short list of potential locations for the new plant to three or four possible sites. Volvo said in a statement that the plant will start operations in 2018 and produce vehicles built along the lines of its XC90 sport-utility vehicle with the caveat that the plant could produce other models for other markets.

“Volvo Cars cannot claim to be a true global car maker without an industrial presence in the U.S. Today, we became that,” said Volvo CEO Hakan Samuelsson. “The U.S. is an absolutely crucial part of our global transformation and today’s announcement makes it perfectly clear that Volvo is in the U.S. to stay.”

The new plant is part of a plan the company outlined in February to reverse its decade-long slump with the goal of selling 100,000 autos per year. Volvo sales in the U.S. totaled only about 56,000 vehicles last year, less than half the brand’s peak in 2004.

Volvo was bought from the Ford Motor Co. by Chinese automaker Geely Holding Group in 2010. The company has factories in Sweden, Belgium and China. Volvo said earlier this year it would start exporting cars from China to the United States, the first major global automaker to do that.

The XC90 is the first vehicle developed completely under Geely’s ownership and will serve as the basis of future models. The decision to build the new U.S. manufacturing plant is part of a five-year, $11 billion investment program that includes overhauling the brand’s product range to expand its global annual vehicle output to about 800,000 cars by the end of the decade.