Volvo Construction Equipment to Expand Production in North America, South Korea and Sweden

Volvo Construction Equipment (Volvo CE) is making a significant investment to expand production worldwide. As part of a larger global industrial footprint investment to support growing customer demand, Volvo Construction Equipment will begin producing crawler excavators and large wheel loaders in Shippensburg, Pa.

For crawler excavators, Volvo will invest about $261 million in three main production sites: in South Korea, Sweden and the U.S. Volvo plans to expand crawler excavator production to meet growing customer demands, mitigate supply chain risks and reduce reliance on long-distance logistics.

The three sites will be in Shippensburg, Pa., in the U.S.; Changwon, South Korea; and a location in Sweden.

In Shippensburg, Volvo CE will not only add crawler excavator production but also expand wheel loader production to include large wheel loaders. Currently, soil and asphalt compactors and mid-size wheel loaders are manufactured at the Shippensburg factory. Shippensburg will also add capabilities to produce mid- to large-size excavators, thereby increasing its global industrial footprint and improving flexibility. The Shippensburg site will add four large wheel loader models to its current wheel loader production.

The company plans to start production in the first half of 2026. Updates will be made to the existing space within the factory to install assembly lines, integrate more automation technologies into the manufacturing process and train employees, with the goal to be production-ready in the first half of 2026.

Investment aims to bolster global machine availability

In a rapidly evolving market, strategically enhancing production capacity and flexibility will allow the OEM to meet current and future customer demands more effectively, according to Melker Jernberg, head of Volvo CE.

“We must respond to growing demand, and we’re excited to expand our facilities to serve our customers better,” said Jernberg. “This investment underscores our commitment to quality and innovation, allowing us to deliver even greater value.”

By expanding production capabilities in key markets, Volvo CE will reduce dependency on any single site and become less reliant on long-distance logistics. Supply chain risks will also be mitigated by expanding domestic supplier bases, allowing the OEM to more numbly manage economic or regulatory challenges.

Jernberg says that fostering collaboration with local suppliers and customers will better position the company for sustained growth and innovation without compromising its standards.

Reduced lead times in North America

“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,” said Scott Young, head of Region North America. “This increase in production capacity means that over 50 percent of our North American machine supply can be built here in Shippensburg, resulting in shorter lead times while also creating opportunities for supplier growth.”

Volvo CE acquired the Shippensburg site in 2007 from Ingersoll Rand and relocated its regional headquarters there in 2012. On top of recent investments, Volvo CE will invest approximately $40 million locally over the next five years, a win for the central Pennsylvania economy.