Volvo CE Expands In Sweden With A New Excavator Manufacturing Facility

The European construction and equipment industry is stabilizing after a challenging time. Now is the best time for OEMs to bring forward their best strategies to help flourish the equipment industry there. 

Volvo CE is already a step ahead and making smart moves. The company has just announced that it is going to open its new excavator manufacturing facility in Sweden to show its strong presence and bring more leads in the region. 

Why was Sweden chosen as the new spot for the excavator plant building?

The new 30,000-square-meter facility in Eskilstuna is intended to solve a growing issue in the European equipment market: the need for quicker, more reliable supply chains and the growing demand for excavators. Volvo CE hopes to reduce its reliance on long-distance logistics and shorten delivery times by moving production closer to customers. This change not only improves operational flexibility but also advances sustainability goals by cutting emissions and simplifying the supply chain.

The expansion goes beyond simply raising production levels, according to Melker Jernberg, Head of Volvo CE. 

He underlined that at a time when international competition is getting more intense, the new facility will help strengthen Europe’s engineering capability. In order to fully realize the potential of this investment, he added, seamless regulatory procedures in Sweden and the EU will be essential.

What would be the production capacity of this new manufacturing plant?

The Eskilstuna plant, which Volvo CE is investing SEK700 million (roughly US$73 million) in, is expected to produce up to 3,500 machines annually. This plant’s mixed production line, which can assemble crawler excavators for sale with internal combustion engines and electric engines in the 14–50 tonne range, is what makes it so significant. 

This dual-production capability is indicative of a larger shift in the industry, where traditional diesel-powered machines still hold a dominant position, but electric models are rapidly gaining traction as contractors prioritize quieter and cleaner equipment options.

The plant is a component of a much larger commitment made earlier in June 2025 when Volvo CE announced an investment of SEK2.5 billion (US$2.6 billion) to improve its excavator manufacturing capabilities in the US, Sweden, and Korea. This worldwide approach shows that the business is getting ready for long-term shifts in consumer demand, technology, and local production requirements.

When will the construction of the plant start?

The decision to proceed with the new Eskilstuna facility is still pending construction and environmental approvals, which are typical for a project this size. Volvo CE anticipates that construction will start in the first half of 2026 and that production will begin about two years after the first phase begins. If all goes as planned, the factory might be up and running by 2028, giving the company’s European network a powerful new manufacturing hub.