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

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.