Volvo Group Considers Expanding Production of Construction Equipment in U.S.

Volvo announced it is considering expanding production of construction equipment in the U.S., a move that would lessen production in Sweden where Volvo is headquartered. ''If the dollar keeps weakening in the long run, this means that we will steer certain investments to North America,'' said Volvo CEO Leif Johansson.

Industry analysts said Johansson was referring to Volvo bulldozers and other ''off-road'' construction equipment but not to the cement mixers and dump trucks. The Volvo industrial line of construction equipment also includes excavators, backhoes and road graders.

Volvo has already announced that it is moving assembly of some truck engines to Hagerstown, Md. and added that it would invest $150 million over four years to modernize the plant. Mr. Johansson was has not given any forecast of U.S. sales through 2007 and beyond. ''We are cautious, especially in the United States, because stricter emission regulations in combination with an economic downturn could hold back sales.''

Volvo, which sold its car division to Ford Motor Co. in 1999, raised its forecast for 2004 truck sales in Europe and North America. Volvo is the world's second-largest producer of heavy trucks.