Volvo to expand US construction equipment production
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Volvo Construction Equipment said it will begin producing crawler excavators and large wheel loaders at its Shippensburg, Pennsylvania, facility as part of a larger global investment to meet growing demand for its heavy machinery.
The Volvo Group subsidiary plans to invest $261 million to expand crawler excavator production across three sites, including Shippensburg; Changwon, South Korea; and a location in Sweden, according to an announcement this week.
The Shippensburg location, which currently manufactures soil and asphalt compactors, as well as midsize wheel loaders, will also add four large wheel loader models to its production, Volvo CE said. The upgrades are expected to be ready in the first half of 2026.
Volvo CE is moving forward with its investment after a period of slow sales impacted by market uncertainty. Construction equipment makers Caterpillar and Deere, which have strong footholds in the U.S., have also struggled with lower demand and are investing in ways to support workforce development and upgrades to existing facilities.
Volvo CE, which recently brought to market a new line of haulers and excavators, saw first quarter global sales drop 8% to 21.12 billion Swedish kronor ($2.2 billion) compared to last year. Sales volume declines in Europe and North America offset growth in Asia and South America markets. Despite the shortfall, the company reported improved service sales and an overall increase in orders and deliveries.
'As a global company we are understandably affected by these turbulent times, but we have shown resilience in the face of uncertainty,' Melker Jernberg, head of Volvo CE, said in an April 23 statement. 'Our industry's transformation may be slower than we would like, but our commitment remains strong as we continue to invest into building a better world for all.'
Part of the reason for Volvo CE's excavator expansion is to mitigate supply chain risks as tariffs pressure companies to reevaluate their operations and network of suppliers. The company said the $261 million investment will help it 'reduce dependency on any single site' and become 'less reliant on long-distance logistics.'
Volvo CE also plans to mitigate risks by expanding its domestic supplier bases, which would allow it to 'more nimbly manage any economic and regulatory challenges,' the company said.
'This increase in production capacity means that over 50% of our North American machine supply can be built here in Shippensburg, resulting in shorter lead times while also creating opportunities for supplier growth,' Scott Young, president and head of Volvo CE's North America region, said in a statement.
In addition to more factory lines, Volvo CE plans to integrate more automation technologies into its manufacturing process and upskill its workers as part of the investment.
A spokesperson did not provide details about the technology upgrades prior to press time.
Volvo CE acquired the Shippensburg facility in 2007 from Ingersoll Rand and relocated its regional headquarters there in 2012. Separate from the machinery expansion, the company has pledged to invest $40 million in the central Pennsylvania area over the next five years.
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