Volvo to Build Heavy-Duty Truck Plant in Mexico
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Volvo Group will build a heavy-duty truck manufacturing plant in Mexico to complement the Swedish original equipment manufacturer’s production in the U.S.
The parent company of Volvo Trucks North America and Mack Trucks expects the 1.7 million-square-foot plant to be up and running in 2026, it said April 11.
An exact location for the plant and the cost of building the facility are details that are not being shared yet, a Volvo Group spokesman told Transport Topics on April 11.
However, Volvo Group said the facility is set to provide additional production capacity supporting the growth plans of both VTNA and Mack Trucks in the U.S. and Canada as well as Mack’s sales in Mexico and Latin America.
Currently, Volvo Group’s output in North America rolls off production lines at the Lehigh Valley Operations plant in Pennsylvania and the New River Valley plant in Virginia, which will continue to be the truck makers’ main production sites in North America, the parent company said.
We've loved showing off the #AllNewVolvoVNL at #TMCAnnual24. A big thanks to everyone who stopped by our booth to chat with our experts and gain insights about how we're revolutionizing the trucking industry. Can't wait to do it again next year! pic.twitter.com/zpwFPz1zuO — Volvo Trucks North America (@VolvoTrucksNA) March 6, 2024
Gothenburg-based Volvo Group said it had invested more than $73 million in the past five years in expansions and upgrades at the Pennsylvania site, and a further $80 million will be spent on preparing the facility for “future production,” it said.
New River Valley, meanwhile, is completing a six-year expansion/upgrade at a cost of $400 million to prepare for production of the redesigned flagship Volvo VNL longhaul tractor.
VTNA unveiled the Class 8 VNL in January, saying 90% of the truck was new. The order book is opening this month, and production is set to start in the third quarter.
The Mexican plant will focus on the production of heavy conventional vehicles for the VTNA and Mack brands, the parent company said, adding that it will be a complete assembly plant for conventional vehicles, including the production of bodies and painting.
Volvo Group said adding production in Mexico will provide logistical efficiencies to support sales to the Southwest and Western regions of the U.S. and to Mexico and Latin America while also increasing the resilience and flexibility of the company’s North American industrial footprint.
Volvo's Chayene de Souza and Magnus Gustafson discuss how new, connected trucks can boost business, enhance safety practices, and reinforce preventative maintenance plans. Tune in above or by going to RoadSigns.ttnews.com.
VTNA and Mack truck production was impacted by company-specific supply chain issues in 2023, executives said on multiple earnings calls in recent quarters.
Until now, Volvo Group was the only major U.S. truck manufacturer without a presence in Mexico, according to S&P Global Mobility Executive Director of Global Truck Research Andrej Divis.
“A plant in Mexico would offer advantages on cost. There may be an angle also with a view toward pure capacity increase, with the Mack brand doing well and with expected healthy North American volumes in the next years,” Divis told TT.
“The market in Mexico, in particular, has been strong recently, where [Volvo Group] participates via the Mack brand, and prospects are good going forward. The much larger U.S., too, is expected to have solid volumes, before and after the [Environmental Protection Agency’s] MY 2027 emissions regulation,” he said in an email.
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Some of Volvo Group’s rival Class 8 truck manufacturers have had plants in Mexico for decades.
Daimler Truck North America owns two plants: Saltillo and Santiago Tianguistenco. Saltillo, where DTNA builds Freightliner Cascadias, opened in 2009, and Santiago Tianguistenco was commissioned in 1991.
Navistar, owner of the International brand of trucks, opened its Escobedo assembly plant in 1998. A full range of the company’s Class 8 lineup is produced at the plant, according to the Traton unit.
Paccar Inc.’s Peterbilt unit manufactures trucks in Mexicali.
