Volvo Group Plans $700 Million Factory in Mexico

Volvo Group is advancing with its US$700 million heavy-truck manufacturing facility in Monterrey, Mexico, expected to commence operations in 2026, despite President-elect Donald Trump's threats of a 25% tariff on imports from Mexico and Canada. The CEO, Martin Lundstedt, emphasized that North America is a strategic priority for the company, which derives about 30% of its revenue from the region. The plant will mainly supply trucks to the United States, Canada, Mexico, and Latin America, although production might be redirected depending on the tariff situation. This new facility will not replace existing U.S. operations, which currently manufacture all trucks sold in the U.S., and Volvo has made investments to expand its capacity in Virginia, Maryland, and Pennsylvania. Additionally, the company plans to initiate high-volume production of electric truck batteries in Sweden, though that timeline has been delayed to 2029-2030. Volvo's move is significant as it is the only major truck manufacturer without operations in Mexico, a crucial market for heavy-duty trucks.