Volvo CE to expand European footprint with new excavator factory

Volvo Construction Equipment it to expand its European industrial footprint with a new crawler excavator assembly factory. Image: Volvo CE

The investment can be seen as part of the OEMs strategy of strengthening its sales of excavators, as well as its commitment to the European market.

Volvo CE says that the 30,000m² Eskilstuna facility will help to meet growing European customer demand by increasing capacity and flexibility. It said that it will also enable reduced reliance on long-distance logistics, shorter delivery times, enhancing supply chain resilience and reducing carbon emissions.

Melker Jernberg, Head of Volvo CE, said that the factory, “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.”

The SEK700 million (US$73 million) facility investment will be built for a production volume up to 3,500 machines yearly on a mixed line of both electric and internal combustion engine models, in the medium and large size classes between 14-50 tonne.

This investment is a part of the SEK2.5 billion (US$2.6 billion) investment announced in June 2025 dedicated to excavator manufacturing capabilities in Korea, Sweden and in the US.

The decision to establish the new crawler excavator plant in Eskilstuna is subject to approvals of relevant environmental and building permits by the regulatory authorities. Groundwork is estimated to begin during the first half of 2026 with start of production within two years from project initiation.