Volvo Construction Equipment (Volvo CE) is significantly expanding its manufacturing capabilities in the United States with a major investment in its Shippensburg, Pennsylvania facility. The expansion will enable the plant to produce medium and large excavators as well as four models of large wheel loaders, adding to its current output of compactors and mid-size wheel loaders.

The expansion is part of Volvo CE’s broader $261 million global strategy to boost production capacity across key markets in South Korea, Sweden, and North America. With these upgrades, the company will be able to meet rising demand in the region more efficiently and reduce lead times for customers across the U.S.—especially those operating in remote and logistically complex areas like Alaska.

"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," said Scott Young, head of Region North America at Volvo CE.

In addition to adding new equipment to the production line, Volvo will also modernize the Pennsylvania facility with advanced automation technologies and workforce training to support the new manufacturing processes. These upgrades are designed to enhance both output and quality, in line with Volvo CE’s broader commitment to innovation.

"We must respond to growing demand, and we're excited to expand our facilities to serve our customers better," said Melker Jernberg, president of Volvo CE. "This investment underscores our commitment to quality and innovation, allowing us to deliver even greater value."

Although the company did not explicitly mention U.S. tariffs on imported machinery as a reason for the expansion, Volvo CE acknowledged that local production will give it more flexibility to respond to economic or regulatory shifts. The investment will also enhance relationships with domestic suppliers and customers, helping the company remain competitive in a challenging and fast-changing global market.

"To more nimbly manage any economic or regulatory challenges," the company stated, the Shippensburg plant will play a key role in fulfilling demand without sacrificing speed or quality.

One region set to see immediate benefits from the expansion is Alaska, where construction and mining operators face logistical hurdles and tight seasonal windows. Construction Machinery Industrial (CMI), the Volvo equipment dealer in Alaska, emphasized the impact shorter delivery times will have on local operations.

"Shorter lead times will help contractors and operators keep projects on schedule, particularly during the tight seasonal work windows unique to the state," CMI said in a statement.

Volvo CE aims to have the upgraded and expanded Shippensburg plant fully operational and delivering U.S.-built excavators and loaders by early next year. Once complete, the facility will stand as a key component in Volvo’s strategy to localize production, reduce dependency on global supply chains, and enhance customer service in North America.

Originally reported by Shane Lasley in Mining News North.