Monday, May 20, 2024

Volvo to build truck manufacturing plant in Mexico

Swedish manufacturer Volvo announced on Thursday its plans to build a plant to begin manufacturing heavy-duty trucks in Mexico by 2026.

The company did not reveal where the new plant will be built, saying in a press release that it will manufacture trucks in Mexico “to support the growth plans of both Volvo Trucks and Mack Trucks in the U.S. and Canadian markets, and to support Mack Truck sales in Mexico and Latin America.”

Mack trucks
The new plant will focus exclusively on building heavy-duty conventional vehicles for the Volvo and Mack brands. (Wikimedia Commons)

Volvo Group, based in Gothenburg, Sweden, owns Mack Trucks, a U.S. automaker based in Greensboro, North Carolina. This will be its first truck manufacturing facility in Mexico.

The new 1.7 million-square-foot plant  will be “a complete conventional vehicle assembly facility,” the company said. The new plant will focus exclusively on building heavy-duty conventional vehicles for the Volvo and Mack brands.

While the Volvo Group declared that the company’s Mack LVO plant in Pennsylvania and its Volvo NRV plant in Virginia will remain the company’s primary North American production sites, the factory in Mexico will “deliver logistical efficiencies for supporting sales to the southwestern/western regions of the United States, and to Mexico and Latin America.”

The announcement was met with dismay by the United Auto Workers (UAW) labor union in the United States.

“We are extremely disappointed in Volvo’s decision to build a class 8 plant in Mexico as our local leadership have been working closely with local and state government officials to build a state-of-the-art plant in [Pennsylvania],” the union stated in a letter, according to WFMZ news.

Over the past five years, Volvo has invested more than US $73 million to expand operations at its Pennsylvania plant and earlier announced plans to spend US $80 million for future production there. In addition, the company is completing a US $400 million expansion at its Virginia plant ahead of the release of the new Volvo VNL model.

The Volvo press release did not reveal how much the company planned to invest in its new plant in Mexico.

Volvo’s first-quarter results won’t be available until later this month, but the company reported a 10% increase in fourth-quarter sales for last year.

With reports from Milenio and Freight Waves

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