Trade tensions are changing how carmakers plan their future.
New U.S. tariffs on imported vehicles are now pushing companies to rethink where they build their cars. Volvo is one of the latest to respond.
The Swedish carmaker is moving more of its production to the United States, reports Boosted. The goal is to avoid the 25 percent tariffs on foreign-made vehicles recently introduced by President Donald Trump.
Right now, Volvo exports about 100,000 cars every year from its factory in Gothenburg, Sweden. That’s nearly half of the plant’s total output. The main models sent to the U.S. are the XC60 and XC90.
Volvo already has a factory in South Carolina. But the company now says that is not enough. More production needs to happen on American soil.
CEO Håkan Samuelsson recently said that the company will increase the number of cars it builds in the U.S. He added that another model will definitely be moved there.
Volvo is currently deciding which model to shift. It is likely to be the XC60 or the XC90. Both are best-sellers worldwide and especially popular in the U.S.
At the same time, Volvo is planning to begin production of its new electric model, the EX60, in Gothenburg next year.
This decision comes with bigger consequences for Sweden. Volvo employs about 20,000 people there. Industry experts are warning that the move could put future Swedish jobs at risk.
Relocating production is not something that happens overnight. It usually takes about two years to move a car model to a new factory.
That makes this a long-term decision, and one driven by changing trade rules and pressure from global markets.
Volvo is not the only carmaker facing these challenges. But its choices could shape how others respond to this new trade environment.
