Volvo faces supply chain issues from factories in Chihuahua, Mexico


Volvo Cars is facing supply chain issues from factories in Mexico, according to CEO Hakan Samuelsson.

Samuelsson said supplier issues in Mexico and lower demand for its S60 sedans were partly to blame for the Ridgeville, South Carolina, plant being idle since June 3.

“First is the disturbances in the supply of parts from Mexico. But it is also a supply-and-demand issue for the S60. There is definitely a market trend toward SUVs,” Samuelsson said Tuesday in Automotive News Europe.

Volvo’s Ridgeville plant is the company’s first manufacturing facility in the U.S., employing nearly 1,500 people. It currently builds the S60 sedan. In 2022, the plant is slated to build the next-generation XC90 sport utility vehicle.

The Ridgeville plant was closed in March and restarted on May 11. The plant was then closed again in June due to supply chain disruptions.

Samuelsson said the company hopes to have the factory running “within some weeks.”

Like many U.S. automakers, Volvo relies on suppliers operating in Mexico. The company has around 29 parts and component suppliers south of the border, mostly located in northern Mexico.

Ford Motor Co. discussed shutting down factories in the U.S. if the company did not receive engines built at its plant in Chihuahua, Mexico, according to Kumar Galhotra, Ford president, Americas and International Markets Group on July 9.

Mexico continues to deal with the coronavirus pandemic, with 349,300 cases, according to the National Agency of Science and Technology. As of Tuesday, 39,485 people had died.

Source: FreightWaves

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