Volvo Construction Equipment (CE) has decided to build a new crawler excavator assembly plant in Eskilstuna, Sweden, to bolster its operations for the European market.
The proposed 30,000m² facility is expected to produce up to 3,500 medium and large crawler excavators per year, including both electric and internal-combustion engine models ranging from 14 tonnes (t) to 50t.
The initiative follows Volvo CE’s previously announced strategy to expand its presence within the excavator segment.
The company has allocated Skr700m ($73.1m) for the Eskilstuna project as part of a broader Skr2.5bn investment programme covering manufacturing capacities in South Korea, Sweden, and the US.
By increasing production capacity and flexibility within Europe, Volvo CE intends to respond more effectively to market demand while reducing reliance on distant supply chains.
The company also expects the new plant to lead to shorter delivery times and lower transport-related carbon emissions.
Volvo CE head Melker Jernberg said: “This strategic investment in the future of excavator production in Eskilstuna marks a new era for us and the Swedish industry. It will significantly contribute to reinforcing Sweden's position as a leader in advanced sustainable manufacturing.
“Bringing additional high-value production and utilising our cutting-edge technology in Eskilstuna, will support local job creation, skills development, and a continued collaboration with Sweden’s strong network of industrial suppliers and research partners.
“Furthermore, it will strengthen Europe’s innovation and engineering power and industrial resilience in an increasingly competitive global market. To get full leverage, we also count on a strong and swift execution on Europe’s and Sweden’s promised agenda on regulatory and administrative simplification.”
Construction of the facility is subject to approval by regulatory authorities for environmental and building permits.
If approved, groundwork at the site could begin during the first half (H1) of 2026.
Production is set to start within two years following commencement of construction activities.
Jernberg added: “We are extremely proud and excited to grow our manufacturing capabilities in Sweden, our home market.
"Eskilstuna has been chosen as the preferred site for the new factory following a comprehensive evaluation of factors such as logistics advantages, available land, and the potential to deliver a complete customer experience supported by the site’s existing facilities and surroundings."
