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Volvo to build S60 exclusively in Berkeley County

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Volvo breaks ground on S.C. plant from Charleston Business Journal on Vimeo.

By Liz Segrist
lsegrist@scbiznews.com
Published Sept. 25, 2015
Updated Sept. 28, 2015

Volvo Cars executives are hoping to renew U.S. demand for the Volvo brand with a new car plant in Berkeley County and a new model — the S60 sedan — built exclusively in South Carolina.

“This is the one and only factory where we are going to produce the S60. So global customers, customers all over the world, will drive a car coming from this factory,” Lex Kerssemakers, Volvo Cars of North America president and CEO, said during the facility groundbreaking on Friday.

Volvo has been selling cars in the United States for nearly 60 years, but sales have been dropping over the past decade. Volvo sold 56,000 cars in the United States last year, compared with more than 120,000 in 2004.

CLICK TO VIEW SLIDESHOW: U.S. Sen. Lindsey Graham (from left), Gov. Nikki Haley, Volvo Charleston General Manager Katarina Fjording and Lex Kerssemakers, Volvo Cars of North America president and CEO, broke ground on the S.C. plant Friday. (Photo/Kathy Allen)CLICK TO VIEW SLIDESHOW: U.S. Sen. Lindsey Graham (from left), Gov. Nikki Haley, Volvo Charleston General Manager Katarina Fjording and Lex Kerssemakers, Volvo Cars of North America president and CEO, broke ground on the S.C. plant Friday. (Photo/Kathy Allen)
Gov. Nikki Haley celebrated with local, state, and Volvo officials during the company's groundbreaking in Berkeley County on Friday. (Photo/Kathy Allen)Gov. Nikki Haley celebrated with local, state, and Volvo officials during the company's groundbreaking in Berkeley County on Friday. (Photo/Kathy Allen)
Volvo plans to produce the S60 sedan at the company's new $500 million Berkeley County plant exclusively. The 2015 model of the S60 is pictured. (Photo/Volvo Cars)Volvo plans to produce the S60 sedan at the company's new $500 million Berkeley County plant exclusively. (Photo/Volvo Cars)

China surpassed the United States as Volvo’s largest market, with 81,000 Volvos sold in 2014. Kerssemakers said he remembers reading news stories that said the Volvo brand would no longer exist in the U.S.

Four months after the Chinese-owned, Sweden-based automaker announced plans to build a massive automotive campus in the Lowcountry, Kerssemakers said U.S. sales have seen double-digit growth, as retailers and buyers are re-engaging with the concept of an American-built car.

“We’ve got our confidence back from our customers,” Kerssemakers said.

The first S.C.-built Volvos are expected to roll off the assembly line in late 2018 and will be exported through the Port of Charleston. Kerssemakers said he could not comment on how many models would be built at the U.S. plant.

“Volvo is moving quickly to expand its presence in the United States with new cars, new engines and now, a new factory,” Kerssemakers said.

The company announced its plans to build a manufacturing site in the Lowcountry in May, after months of site visits, negotiations and meetings with state and local officials. The deal nearly fell through several times.

The automaker will occupy 2,880 acres of the 6,880-acre Camp Hall Tract, which is located near Ridgeville about 10 minutes off Interstate 26 at exit 187. The remaining land will be reserved for Volvo suppliers or other automotive or industrial companies.

Off the interstate, a long, unpaved road leads to the site of the future plant. A muddy, semi-flooded expanse of land has been cleared of trees. Two Volvo earthmovers sit nearby.

The massive site stretches for miles beyond several white tents where, the day of the groundbreaking, Gov. Nikki Haley, U.S. Sens. Tim Scott and Lindsey Graham, and S.C. Commerce Secretary Bobby Hitt gathered for the news conference. Also in attendance were representatives from other groups that helped coordinate the Volvo deal, such as Santee Cooper, the S.C. State Ports Authority, the S.C. Technical College System, Berkeley County and readySC.

Construction has officially started on the $500 million car manufacturing facility, which will be capable of producing up to 100,000 cars a year.

In addition to the manufacturing footprint, Volvo plans to build a museum showcasing Volvo’s history and future plans, as well as a test track for customers to take their new cars out for a test drive.

The company wants to mimic its customer pickup program in Europe, in which customers travel to the facility to pick up their cars, use the test track and then vacation in Charleston.

“The auto industry is more than just car lots now,” Haley said. “It’s very much about people wanting to see how their cars are made. They are wanting to be able to drive them on the test track. ... It really has become somewhat of a hobby and something people are very proud of.”

Growing an automotive workforce

The manufacturer has received more than 18,000 applications thus far for the initial 2,000 job openings, Kerssemakers said. The automotive campus will employ up to 4,000 workers over time.

Similar to other advanced manufacturers around the state, Volvo plans to partner with readySC and the state’s technical colleges to customize a workforce training program for the plant.

Volvo also plans to build an on-site training center, though a timeline for that was not disclosed. Employees will travel to other Volvo facilities in Sweden and China to learn firsthand about Volvo operations, Kerssemakers said.

Katarina Fjording — who has spent three years in China building two Volvo factories and is now the general manager of Volvo Charleston — said creating a skilled automotive workforce pipeline is crucial for sustaining Volvo’s U.S. site.

‘Building an industrial city’

The Volvo project has secured $123 million from the state for site infrastructure. The General Assembly’s Joint Bond Review Committee approved the contentious economic development bond in June.

The incentives were debated among committee members who questioned the borrowing plan, which will cost the state $87 million in interest. Hitt said the bond authorization was needed to fulfill the state’s contractual obligation to the company.

About $69 million of the bond will fund a new interchange connecting I-26 with the Volvo plant. The remaining $54 million will be used to prepare the site with roads, water, sewer and electricity. A rail plan for the site is still in the works. Commerce declined to disclose any details.

Haley, Hitt and other state officials traveled to Gothenburg, Sweden, earlier this month on an economic development trip to recruit Volvo suppliers to locate near the S.C. plant. Haley said that she talked to more than 100 suppliers during the visit and that many expressed interest in building a plant in South Carolina.

“We’re building an industrial city here and we will fill it up,” Hitt said.

Fjording said some of Volvo’s huge supplier base already exists in the Southeast and in South Carolina. Kerssemakers said he expects that base to expand over time as volumes increase at the Berkeley County plant.

“It’s a little bit early to say, but we know by experience that once we build a factory, global suppliers are interested in moving as close to where the cars are produced as possible,” Kerssemakers said.

Reach staff writer Liz Segrist at 843-849-3119 or @lizsegrist on Twitter.

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