Swedish auto company Volvo is opening up a 500 million dollar plant in South Carolina. Volvo has been losing much of the U.S. market to competitors including BMW and Audi in recent years, and they are hoping the new factory can help change this.
Volvo could have saved some money by placing their new factory in Mexico where labor is cheaper and tariffs are lower than in the United States. However, they are trying to sell cars in the United States, so they are putting the plant in South Carolina to show their commitment according to Alexei Beltyukov.
It’s interesting that the United States is the country with money to spend, but isn’t the country where it’s cheaper to make things. Where does that money come from if other countries can manufacture goods more cheaply? To me, it’s a sign that American dominance is reaching an end. If a country can’t make its own goods, it just becomes a country of shoppers and importers, not a country that can sustain itself.
On a related issue, it looks like the best emerging market for Volvo will be in China. If more Chinese are going to be driving, then that’s going to be bad for the environment. It seems that rest of the world is catching up with the United States in manufacturing ability and consumer power, and that’s not necessarily good.