Swedish automaker Volvo recently showed it is pressing ahead with plans for a $700 million heavy-duty truck factory in the northern commercial city of Monterrey, Nuevo León, despite price list threats from the president-elect of the United States. United, Donald Trump.
At the Consumer Electronics Show in Las Vegas on Wednesday, Volvo Chief Executive Martin Lundstedt told Reuters that the Mexican task is at an “initial level and continuing. “The plant is expected to start operations in 2026, Reuters reported.
Trump has said that one of his first responsibilities after taking office on Jan. 20 will be to impose a 25% tariff on imports from Mexico and Canada unless illegal immigration and fentanyl trafficking are controlled.
Depending on how the price lists play out, Volvo’s planned plant in Mexico would likely or would not ship trucks to the United States, Lundstedt said. Volvo has the option to use the plant for sales outside the United States, he added. “This is not about replacing our facilities in the United States,” he said.
Volvo’s U.S. factories currently make 100% of the trucks it sells in that country, according to Reuters. The company has been investing in plants in Virginia, Maryland and Pennsylvania to expand that capacity, Lundstedt said.
The Mexico plant — originally announced last April — will supplement Volvo’s U.S. production and provide additional capacity to support the growth plans of both Volvo and Mack semi-trucks in the U.S. and Canadian markets, and Mack truck sales in Mexico and Latin America.
Volvo is one of four manufacturers that supply nearly all of the heavy-duty trucks in Latin America, Erik Smith, a director in the automotive and industrial practice at AlixPartners, told Reuters.
Of the four, Volvo is the only one that doesn’t have a presence in Mexico, Smith said, “so they’re probably contemplating building one. “
The Mexico plant will focus on production of heavy-duty conventional vehicles for the Volvo and Mack brands. It will be a complete conventional vehicle assembly facility including cab body-in-white production and paint.
The plant, located in Ciénega de Flores, just outside the state capital of Monterrey, is expected to be Volvo’s largest facility.
Construction of the plant, which is expected to open early next year, began in mid-October. The governor of Nuevo León, Samuel García, said at the time that the investment of $700 million will be the largest in the state in 2024.
Volvo explained its reasons for choosing Monterrey as the location of its factory in an August 2024 press release announcing the investment. “Monterrey brings significant logistical efficiencies to sales in the southwest and western regions of the United States, as well as Mexico and Latin America. With its proximity to the United States border and well-developed infrastructure, the Group considers Monterrey an ideal location to build a mature sourcing and production ecosystem.
With Reuters and El Economista
Volvo Group Trucks is not related to Volvo Cars. You’re 1st sentence is incorrect information.
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