Swedish automotive giant Volvo will raise its investment in a new truck factory in Mexico from $700m to $1bn, despite President Trump’s 25% tariffs on vehicle imports from its southern neighbour.
The factory is being built in Monterrey in the northeastern state of Nuevo León.
Mexico’s economy minister Mercelo Ebrard confirmed the news in a post on X.
“I’ve received information from Volvo’s global headquarters in Sweden that they’ve decided to increase the planned investment in Ciénaga de Flores, Nuevo León, from $700m to $1bn. The truck-making plant will begin operations in 2026. Great news!” he wrote.
One of the aims of Trump’s tariffs is to push companies to move production in the US.
But Volvo chief executive Martin Lundstedt told Reuters that work on the Mexico project was continuing.
He said the factory “may or may not” service the US market, depending on what happens to tariff policy. It will make Volvo and Mack trucks.
Volvo already has factories in South Carolina, Maryland and elsewhere. Lundstedt said the Monterrey works was not a replacement for them.
Volvo gave the $700m figure in a press release in August. It said Monterrey was chosen because of its good communications with the southern US states.
It added: “The group considers Monterrey an ideal location for building a mature supply and production ecosystem”.
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