Volvo Construction Equipment will spend just over $260m expanding its capacity to make crawler excavators in South Korea, Sweden and the US to make the factories more self-sufficient and less at risk of economic shocks like tariff hikes.
A final decision regarding the location, scope and timing of the expansions will be made later this year, but one move has been finalised: the addition of an excavator assembly line to Volvo’s factory in Shippensburg, Pennsylvania.
Volvo said its plan would “enhance capacity and flexibility … and improve operational efficiency and resilience, ensuring shorter delivery times and tailored solutions for regional needs”.
The crawler excavator market was valued at $47bn last year, and is expected to reach $68bn by 2034, an annual growth rate of 4%. Volvo is one of the main players in the market, alongside Caterpillar, Komatsu and Hitachi, among others.
The move to more local production, with greater use of local suppliers, eases logistics and reduces what the company called “economic and regulatory challenges”.
In particular, equipment makers with supply chains that require imports into the US are vulnerable to the US’ unpredictable changes in tariff policy.
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