Editor’s note: This story has been updated to better clarify the timings and reasons for the temporary shutdowns of Volvo's U.S. factory this summer.
Volvo aims to have its U.S. plant running again “within some weeks,” said CEO Hakan Samuelsson, after unplanned and planned shutdowns that he attributed to two key factors.
“First is the disturbances in the supply of parts from Mexico. But it also a supply-and-demand issue for the S60. There is definitely is a market trend toward SUVs,” Samuelsson told Automotive News Europe.
In the first half, utility vehicles accounted for 69 percent of Volvo’s global sales while sedans such as the S60 represented 14 percent of the automaker’s worldwide volume. In addition, first-half sales of the S60 in the U.S. were down 25 percent to 6,738, according to the Automotive News Data Center. Global sales of the sedan were up 55 percent to 16,389, according to Volvo's data.
Volvo closed its factory in Ridgeville, S.C., near Charleston, March 26 and restarted production on May 11. The plant was closed again from June 16 to 26 because of supply disruptions, a company spokeswoman said. Production resumed June 29 and continued until July 2.
The plant closed again July 3 and will reopen July 29. The current shutdown is a planned stoppage that is part of the factory's annual summer break. This, however, is the first time the plant has been closed for 26 days during the summer, the spokeswoman said, adding that the temporary shutdown was related to volume, meaning the lack of demand for the S60 that Samuelsson referenced.
Starting operations at the $1.1 billion factory in 2018 with production of a sedan instead of a crossover or SUV was a surprise to many market watchers, especially since premium rivals Audi, BMW and Mercedes-Benz all produce crossovers in North America.
“Charleston really needs an SUV, which we are planning to introduce in the second step in 2022 with the XC90,” Samuelsson said Tuesday. “Then the factory will be fully utilized.”
Samuelsson told Automotive News last October that the automaker would make the electric version of its third-generation XC90 crossover at the U.S. factory. It will be the first electric Volvo to be made in the U.S.
Volvo’s debut entry into the full-electric sector will be the XC40 Recharge P8, which will be made at its factory in Ghent, Belgium, starting later this year.