Volvo is building its first factory in the U.S.

Volvo is building its first factory in the U.S.
(Image credit: Mark Renders/Getty Images)

The Volvo Car Group hopes to boost its diminishing sales by building an auto factory in the U.S. The company announced the $500 million investment on Monday.

Bloomberg reports that the Sweden-based company will choose the factory location "within the next two months." The site will begin production in 2018 and will have a target capacity of 100,000 to 120,000 cars.

Volvo's U.S. sales last year included just 56,000 cars, less than half of what it sold at its peak in 2004. Having a U.S. factory would put the company "on a similar footing as BMW AG and Mercedes-Benz," Bloomberg notes.

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The U.S. factory would be Volvo's fifth worldwide. Volvo has two factories in Europe and two in China.

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Meghan DeMaria

Meghan DeMaria is a staff writer at TheWeek.com. She has previously worked for USA Today and Marie Claire.