By Abhirup Roy and Marie Mannes
LAS VEGAS (Reuters) – Sweden’s Volvo (OTC:) Group is continuing with its deliberate $700-million heavy-truck manufacturing facility in Monterrey, Mexico, CEO Martin Lundstedt informed Reuters on Wednesday, whilst President-elect Donald Trump threatens to impose U.S. tariffs on imports of automobiles and different items.
The maker of Volvo and Mack semi vehicles has focused progress in North America, which accounts for about 30% of firm income, as a strategic precedence and expects the plant to start out operations in 2026. It expects the manufacturing facility to ship automobiles to america, Mexico and Canada, in addition to to Latin America.
Trump has mentioned that instantly after his Jan. 20 inauguration, he’ll signal all mandatory paperwork to start charging a 25% tariff on imports from Mexico and Canada until these nations clamp down on unlawful immigration and fentanyl trafficking.
The Mexico challenge is at an “early stage that’s persevering with,” Lundstedt mentioned in a Reuters NEXT Newsmaker interview on the sidelines of CES 2025, an annual tech convention in Las Vegas. He mentioned Volvo has choices to make use of the plant for gross sales outdoors america.
“This isn’t a substitute of our American amenities,” he mentioned, Relying on what occurs with U.S. tariffs, Volvo’s Mexico manufacturing facility might or might not ship vehicles to the U.S., he mentioned.
Volvo’s U.S. factories at the moment make 100% of the vehicles it sells in america. The corporate has been investing in vegetation in Virginia, Maryland and Pennsylvania to increase that capability, Lundstedt mentioned.
Trump’s tariff proposals have despatched a shockwave by way of the automotive sector as a result of a swath of passenger carmakers, together with BMW (ETR:), Toyota (NYSE:) and Normal Motors (NYSE:), have invested in Mexico factories to make the most of decrease labor prices and business-friendly insurance policies.
Lundstedt additionally mentioned Volvo expects high-volume manufacturing at a deliberate battery plant in Sweden to start a few years later than the unique goal of 2029-2030.
Volvo had mentioned in September it will delay building of the plant by one or two years and mentioned on the time it was unsure if this might have an effect on the beginning of producing.
Volvo desires to be on the forefront of inexperienced investments, together with in zero-emissions trucking, however is refining its technique to regulate for market elements, Lundstedt mentioned. That’s as a result of it doesn’t need to be “combating all of the windmills alone, like Don Quixote and Sancho Panza,” he mentioned, referring to fictional characters from the well-known novel.