On Monday, Swedish carmaker Volvo said that it would make an investment of $500m in order to construct a new factory in the US. This step has been taken by the company as it is looking forward to sell more 100,000 cars a year in the US, which is world's second largest auto market.

The target of selling 100,000 cars a year focuses on approximately 80% growth from current sales levels. It is expected that this year, the US market will reach 16.9m units. There has been growth in sales of General Motors, Chrysler and Ford.

According to Volvo, the plan will consist of the 'complete renewal' of its products over the next four years. According to Håkan Samuelsson, chief executive and president, their global transformation has special focus on the US and the announcement, which has been made today, also indicates that.

As per Volvo, the new plant will lead to creation of jobs; the company however, didn't mention the number of people, it is planning to hire. The company would be spending nearly $500 million for the construction of its first assembly plant in the United States, which is related to a striving plan to deal with lagging sales.

According to Volvo CEO Hakan Samuelsson, "Volvo Cars cannot claim to be a true global car maker without an industrial presence in the US. The US is an absolutely crucial part of our global transformation and today's announcement makes it perfectly clear that Volvo is in the US to stay".

Volvo said that the new factory will be helpful in achieving its volume targets in the US, where it is looking forward to sell 100,000 light vehicles a year. In 2014, the company's US sales totaled only 56,366.