Greensboro News & Record

January 11, 1996

Volvo Car Plant May Be Headed For Southeast

Staff and Wire Reports

Copyright © 1996, Greensboro News & Record

The Swedish carmaker may join BMW and Mercedes-Benz by building an automobile plant in the southeastern United States.

Swedish carmaker AB Volvo said Wednesday it is considering building cars in the southeastern United States, and that manufacturing and delivery costs, rather than local incentives, would most influence its decision.

The Wall Street Journal said that Volvo was concentrating its search on the Interstate 85 corridor, which links cities such as Greensboro, Charlotte and Atlanta.

BMW and Mercedes-Benz have built auto plants in the Southeast.

North Carolina economic development officials have been asked to submit site descriptions to an unidentified consultant, said Marc Bush, economic developer for the Greensboro Chamber of Commerce.

While the officials were never told who the consultant was working for, Bush said, the request related to a 1,000-acre project that was ''rumored to be automotive related.''

In 1993, Mercedes-Benz looked at a 1,000-acre site in Mebane for its first U.S. auto plant, but the company opted to build in Alabama. ''Because of the publicity associated with the Mercedes search, you could assume that the (Mebane) site is on the top of many priority lists,'' Bush said. Volvo would be following in the tracks of German and Japanese carmakers, which have been attracted to the United States by the relatively weak dollar, cheaper labor costs and the sales appeal of cars that are technically American-made.

Volvo's comments were in response to a report Wednesday in the Wall Street Journal that the carmaker is studying whether to build passenger cars and sport utility vehicles in North America and is talking with other companies about a joint project.

''We are looking at different alternatives. ... There have been rumors for quite some time'' about a U.S. plant, spokesman Mats Edenborg told The Associated Press. ''Nothing new has happened. We don't have any news to report.''

In November, Volvo chief executive Soeren Gyll confirmed that ideas for a U.S. operation were ''on the table'' but emphasized a move probably would be made only in conjunction with the launch of a new vehicle.

Edenborg declined to disclose possible sites. He said Volvo has ''had a lot of offers from local governments,'' but emphasized any ''decision would depend on other factors,'' such as proximity to suppliers.

In addition to the German expansion in the United States, Japanese automakers Toyota and Honda have announced plans to increase production at their North American plants.

Volvo already has operations - either wholly owned assembly plants or joint ventures - in many foreign countries. Besides the United States, it has been looking at China for future expansion, Edenborg said.

Volvo has held talks with Japan's Mitsubishi Motors Corp. about a possible North American venture, the newspaper report said, citing people close to the negotiations. The companies work together in the Netherlands.

Volvo GM Heavy Truck Corp., a joint venture that is 87 percent owned by Volvo, already has plants in Dublin, Va., and Orrville, Ohio. In 1994, sales totaled 23,729 medium- and heavy-duty trucks, for a 6.7 percent U.S. market share, according to Ward's Automotive Yearbook.

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Copyright ©1996, Greensboro News & Record.

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