Volvo Construction announced in June that it is expanding its North American production in response to increased global demand and strain on global supply chains. Here’s what you need to know about this expansion.
Quick Facts
In its Shippensburg, PA facility, Volvo CE will:
- • Begin producing mid- to large-size crawler excavators.
- • Add four large wheel loader models to its existing wheel loader line.
- • Install new assembly lines, increase automation, and train workers in preparation for production starting in early 2026.
Key benefits of this expansion include:
- • Improved lead times and machine availability for North American customers.
- • A more resilient supply chain with reduced reliance on long-distance logistics.
- • Increased collaboration with local suppliers, boosting regional economic growth.
Volvo announced its plans in a press release on June 10th to expand three facilities in 2026. One in South Korea, one in Sweden, and their facility in Shippenburg, Pennsylvania. This expansion comes after a significant period of slowed sales due to market uncertainty, and after news that competitors Caterpillar and Deere are also making moves to invest back into their manufacturing state-side.
According to the head of the North American Region, Scott Young, the long-planned move is in response to a growing need to decrease lead times domestically.
“This increase in production capacity means that over 50% of our North American machine supply can be built here in Shippensburg, resulting in shorter lead times while also creating opportunities for supplier growth.”
The proposed plans include facility updates in the form of additional assembly lines and the integration of more automated technologies. Volvo also looks to improve employee training. With these improvements, Volvo looks to increase the production of their compactors and mid-size wheel loaders, as well as expand the factory’s manufacturing capacity into large-wheel loaders and crawler excavators. The company has plans to add four large-wheel loader models to its product offerings, and this investment will facilitate that goal.
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Investment aims to bolster global machine availability
Amongst the primary motivations for this financial push, Volvo hopes to bolster the availability of their machines globally. Strategically enhancing production capacity in this way will allow the firm to meet current and future consumer demands, according to Melker Jernberg, Head of Volvo Construction.
“We must respond to growing demand, and we’re excited to expand our facilities to serve our customers better,” said Jernberg. “This investment underscores our commitment to quality and innovation, allowing us to deliver even greater value.”
The increase in domestic American production means less of a reliance on long-distance logistics. Supply chain issues have been a persistent threat since the global pandemic, and the subsequent slow recovery of these critical chains has weighed heavily on many industries, especially manufacturing. With these global efforts, Volvo hopes to alleviate the associated stress points and better serve its customers. According to the company, these moves will allow Volvo “to more nimbly manage any economic or regulatory challenges.”
Improvements to Volvo facilities are set to begin in early 2026. The increase in local production promises to not only grow Volvo’s global business interests but will also boost the local economy around the Pennsylvania town.
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