Volvo Construction Equipment will build a new excavator factory in Eskilstuna, Sweden. The 30,000 square meter facility aims for completion by 2028. It targets annual production capacity of 3,500 machines.
The 700 million kronor investment follows recent Volvo CE factory expansions in the United States and South Korea. The Swedish facility will serve European excavator customers directly. This reduces dependency on long-distance logistics and shortens delivery times.
Anne Bast, European marketing manager for Volvo CE, explained workforce implications remain uncertain. "We cannot release specific employment numbers yet," she stated. "Production volumes always depend on market demand."
Factory construction awaits environmental permits and building approvals. Work could begin during the first half of 2026. The Eskilstuna plant will manufacture both electric and combustion engine excavators. These will range from 14 to 50 ton weight classes.
CEO Melker Jernberg called this a strategic investment in future excavator production. "This marks a new era for us and Swedish industry," he said in a statement. "It strengthens Sweden's position in advanced sustainable manufacturing."
The Eskilstuna factory represents part of broader 2.5 billion kronor investment plans announced earlier this year. Volvo CE belongs to the Volvo Group truck conglomerate. Their B-share rose 1.4 percent in Monday's early trading.
This expansion occurs during a volatile period for global manufacturing. Trade tariffs and geopolitical concerns have created market uncertainty. Yet Volvo continues betting on European construction equipment demand.
The factory location in central Sweden offers strategic advantages. Eskilstuna provides industrial infrastructure and skilled workforce. It positions Volvo closer to key European markets while maintaining Swedish manufacturing roots.
This investment demonstrates confidence in Sweden's industrial future. It counters some narratives about manufacturing decline in Nordic countries. The focus on both electric and traditional excavators shows transitional strategy.
European customers will benefit from reduced shipping times and lower emissions. Supply chain resilience improves with localized production. This matters greatly in construction industries where equipment availability impacts project timelines.
Volvo's continued investment in Swedish manufacturing signals broader economic stability. It represents one of several major industrial projects currently underway in the region. The company maintains its commitment to Swedish engineering excellence while adapting to market demands.