The Swedish heavy vehicle manufacturer Volvo confirmed that it will invest $700 million in the construction and equipment for the production of vehicles of the Volvo Trucks and Mack Trucks brands for the United States and Canada markets, and the Mack brand for Mexico and Latin America.
“The Monterrey plant represents an investment of approximately $700 million and will focus on production of heavy-duty conventional vehicles for the Volvo and Mack brands. It will be a complete conventional vehicle assembly facility including cab body-in-white production and paint,” the company reported in a statement.
For the new production investment in Mexico, Volvo reported that it agreed to purchase the production plant for cabins for its Mack trucks in North Carolina from the company Commercial Vehicle Group (CVG) for $40 million. The agreement could be finalized in the second half of this year.
The company reiterated that the plant is expected to be operational in 2026.
Last week, Mexican press reports mentioned that Volvo has started talks with auto parts suppliers.
The new plant will be built in Ciénega de Flores, located 68 miles northeast of the northern city of Saltillo, the home of Freightliner, the largest producer of heavy trucks in Mexico, and 16 miles northeast of the city of General de Escobedo, the home of Navistar International Corporation, the second largest producer of heavy trucks in Mexico. It is also 25 miles southeast of the production plant of KIA, the sixth largest producer of light vehicles in the country.
Data from the International Organization of Motor Vehicle Manufacturers (OICA), viewed by SteelOrbis, shows that in 2023 Mexico was the world's fifth-largest producer of heavy trucks in the world with a global share of 6 percent, surpassed by the United States (9 percent), India (9 percent), Japan (13 percent) and China (44 percent).
There are 12 companies producing heavy vehicles (trucks and buses) in Mexico: Freightliner, International Truck, Kenworth, Mercedes-Benz Autobuses, Isuzu, Foton, Volkswagen Trucks and Buses, Volvo Buses, Hino, Dina, MAN and Shacman (Shaanxi Automobile Group).
Volvo has a bus plant in Tultitlán, in the central state of Mexico. That city is located 26 miles from Mexico City, the country's largest market. In 2023, of the nearly 223,000 heavy vehicles manufactured in Mexico, Volvo Buses only contributed 0.5 percent of the total.