VolvoCE Doubles Down on North America with Global Production Revamp
Volvo Construction Equipment (Volvo CE) is turning up the volume on its global manufacturing strategy with a decisive investment push into North America.
The company has announced it will begin producing crawler excavators and large wheel loaders at its Shippensburg, Pennsylvania plant, marking a significant step in its long-term industrial game plan.
This move isn’t just about geography. It represents a shift in how Volvo CE is tackling the increasing complexity of global demand, supply chain disruptions, and the push for more sustainable logistics. The investment is part of a broader global initiative, totalling 2,500 million SEK (around $261 million), with a strong focus on three key regions: South Korea, Sweden, and the United States.
A Bold Bet on Shippensburg
Shippensburg, long a key player in Volvo CE’s North American footprint, is now poised to take on a bigger role. The factory currently rolls out mid-size wheel loaders and compactors, but from 2026, it will also start churning out mid- to large-size crawler excavators and four large wheel loader models.
Scott Young, Head of Region North America, shared his enthusiasm: “Bringing excavator production to North America and growing the range of wheel loader models built here has always been part of our long-term industrial plan, so it’s exciting to finally share this news with our employees, dealers and customers.”
This isn’t just a capacity upgrade. It’s a fundamental shift designed to halve delivery lead times, boost regional supply security, and create fertile ground for local supplier growth. In fact, by the time the changes go live, over half of Volvo CE’s machine deliveries to North American customers will be built right there in Shippensburg.
Vote of Confidence
The announcement brings more than just headlines. Volvo CE is doubling down with an additional investment over the next five years. That’s on top of major upgrades to the existing production facility, including:
- New crawler excavator assembly lines
- Integration of advanced automation systems
- Extensive employee training programmes
Melker Jernberg, President of Volvo CE, explained the rationale: “We must respond to growing demand, and we’re excited to expand our facilities to serve our customers better. This investment underscores our commitment to quality and innovation, allowing us to deliver even greater value.”
By expanding its manufacturing capacity in the United States, Volvo CE isn’t just bringing jobs to Pennsylvania. It’s reinforcing resilience across its global production chain and reducing reliance on overseas shipments.
Localisation to Cut Carbon and Complexity
Let’s face it: today’s supply chains are one container ship delay away from chaos. Volvo CE’s push to localise production makes strategic sense. By manufacturing closer to the end customer, the company can lower transportation emissions, reduce its carbon footprint, and adapt more quickly to regional needs and regulations.
And that adaptability is vital. As infrastructure projects across North America accelerate, demand for heavy construction equipment is set to spike. With this move, Volvo CE is ensuring that it won’t just meet that demand – it’ll stay ahead of it.
Jernberg highlighted the broader impact: “This expansion demonstrates our efforts to respond to customer demand by investing in our crawler excavator business closer to key markets and customers.”
A Global Investment with Local Consequences
While the spotlight might be on Pennsylvania, the bigger picture spans continents. The $261 million investment is split across three production hubs:
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Changwon, South Korea: The lion’s share of the funding will upgrade this key site, ensuring it remains the cornerstone of Volvo CE’s manufacturing capacity in Asia. It’s also a hub for product development and procurement.
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Sweden: Plans are in motion for European crawler excavator production, with the final decision on location and scale expected later in 2025.
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United States: Shippensburg is the poster child for Volvo CE’s new North American era.
Each location has been selected for its strategic value, ensuring the company has robust regional capabilities that allow it to pivot, adapt, and innovate regardless of global market turbulence.
Changwon: The Beating Heart of Asian Operations
The Changwon site isn’t being left behind in the wake of Volvo CE’s North American surge. Quite the opposite. It remains one of the company’s most vital assets, with investments aimed at improving global production volumes, supply chain agility, and cost efficiency.
The site will also continue to serve as a knowledge and innovation hub, leveraging its product development capabilities to influence designs globally. It’s a clear case of not putting all your eggs in one basket, but rather strengthening every basket you’ve got.
Eyes on Sweden
Europe is next in line for expansion. While the exact details are still under wraps, Sweden has been selected to host Volvo CE’s crawler excavator production for the region. A final decision regarding the facility’s scope and timeline will land in 2025, rounding out the tri-continental strategy.
What’s clear is that Sweden’s long-standing tradition of manufacturing excellence and green innovation will play a central role in Volvo CE’s future plans.
Boosting Supply Chain Resilience
By spreading production across three continents, Volvo CE is setting up a fortress of manufacturing capability. This structure makes it possible to:
- Diversify supplier bases
- Mitigate economic and political risks
- Improve delivery reliability
- Lower logistics costs
- Respond rapidly to regional market shifts
That’s a winning formula in today’s ever-shifting construction landscape. And it’s one that should instil confidence in dealers, customers, and investors alike.
A Sustainable Growth Path
While expansion often brings thoughts of bigger, faster, and more, Volvo CE is also keeping its eye on the planet. Localised production means fewer shipments, less fuel burned, and ultimately a greener footprint. It also opens the door to more circular practices, such as regional remanufacturing and recycling.
All of which aligns with Volvo Group’s broader sustainability goals, including its aim to become a net-zero emissions company by 2040.
A Bright Future for Shippensburg and Beyond
This isn’t just a win for Volvo CE. It’s a win for Pennsylvania, for North American contractors, and for the construction equipment industry as a whole. Shippensburg is getting a new lease on life, and Volvo CE is positioning itself to lead the next chapter in global infrastructure development.
As Jernberg put it: “Fostering collaboration with local suppliers and customers will better position the company for sustained growth and innovation without compromising the high standards that Volvo CE equipment is known for.”
In an industry where lead times, sustainability, and operational resilience matter more than ever, Volvo CE’s strategy is clear: build closer, grow smarter, and dig deeper.
