RIDGEVILLE — Volvo's most popular automobile in the United States will be made in America beginning in 2021 as part of a $520 million expansion of the Swedish automaker's manufacturing campus in Berkeley County, company officials said Monday.
The XC90 SUV, which has accounted for one-third of all Volvo sales in the U.S. since its debut in April 2015, will be made on a second assembly line at the automaker's facility near Ridgeville. It will join the newly redesigned S60 sedan, which will be built exclusively at the plant beginning next summer.
The second manufacturing line brings Volvo's total investment to more than $1 billion at its only North American manufacturing site, which is still under construction. The automaker said Monday it will hire an additional 1,910 workers to go with the 2,000 jobs that were announced in 2015 when Volvo first said it would build at the Camp Hall Industrial Campus off Interstate 26.
Lex Kerssemakers, president and CEO of the automaker's North American operations, said the expansion "not only underscores Volvo's commitment to the United States but also our commitment to South Carolina."
Kerssemakers said the company chose the Palmetto State "because of the entrepreneurship, infrastructure and attitude" of the state's workers and leaders, and "we have never regretted it one second."
All of the production workers that have been hired to date are South Carolinians who have gone through the ReadySC training program run by the state's technical college system. Kerssemakers said Volvo wanted to make the announcement of a second production line now because it will take years to hire and train the additional workers who will build the XC90.
In addition to the second assembly line, Volvo will build an 88,000-square-foot office complex at the site that will house a research and development center, a training center, management offices and a regional sales office. About 300 people will work in the office complex.
Bobby Hitt, the state's Commerce secretary, said this is the only instance he knows of in which an automaker has decided to double its investment in a facility before the first car has rolled off the assembly line. Hitt, a former BMW executive, said it took years of production before that company made a similar move at its Upstate manufacturing campus.
"This talks about Volvo's overall confidence in the United States for their brand," Hitt said. "But it also talks about the reception they've had from the community, the support they've received from Berkeley County and how much attention they're getting. They feel like this is the right place for them to beachhead, and they're not going to slow down."
The Commerce Department next month will ask the state's Joint Bond Review Committee and the state's Fiscal Accountability Authority for $46 million in incentives to help offset infrastructure costs associated with the expansion. Berkeley County Council has approved $3.5 million in incentives for the expansion, with most of the money going to a waterline tie-in to Lake Marion and road improvements.
The XC90 currently is assembled at Volvo plants in Sweden and Malaysia. The redesigned version of the crossover vehicle began production in late 2014 and sales started the following year.
Kerssemakers said the XC90 "has played an important role in the turnaround of Volvo in the United States" as it quickly became the automaker's most popular vehicle here, with 62,612 of them sold through August.
"It's a huge decision for Volvo to take our flagship SUV out of Europe and have it produced in the United States," Kerssemakers said. "The United States is the biggest single market, but it's not only about money and people. It's about emotions. And we felt that this was the right thing to do."
Volvo will decide within the next six months whether all XC90s will be built in Berkeley County or if the SUV will maintain a second production line overseas.
Volvo initially plans to build about 60,000 vehicles per year in Berkeley County, with that rate rising to about 150,000 per year by the time the XC90 is introduced into the production line. At least half of those vehicles will be exported through the Port of Charleston to markets worldwide, while the rest will be sold domestically.
Jim Newsome, president and CEO of the State Ports Authority, called the expansion "exciting news for our port and state."
"Proximity to a port is important to automotive manufacturing, and the SPA values the role we will play in Volvo Cars' international supply chain," Newsome said. "We look forward to a long-term partnership and are committed to capably supporting their current and future growth needs."
Monday's announcement was Kerssemakers' final duty as head of North American operations. The Netherlands native will move overseas this week to take over operations in Europe, the Middle East and Africa. Anders Gustafsson, who has led those three overseas markets since 2015, is moving to the U.S. headquarters in New Jersey to take over the American operations.
Volvo Cars, headquartered in Gothenburg, Sweden, is owned by China's Geely Holding Group. The Berkeley County manufacturing campus is part of the automaker's effort to regain market share in the United States, which slipped during its previous ownership by Ford Motor Co.
Volvo's sales in the United States this year have totaled 49,066 vehicles through August. While that represents a year-to-date decline of 7.2 percent from sales in 2016, volume in August was up 4.1 percent compared with the same month last year. Kerssemakers said he expects to see a year-over-year gain by the time final 2017 numbers are announced.