THE VIRGINIAN-PILOT 
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Thursday, January 11, 1996             TAG: 9601110380
SECTION: BUSINESS                 PAGE: D2   EDITION: FINAL 
SOURCE: STAFF AND WIRE REPORTS 
                                             LENGTH: Short :   47 lines

VOLVO AGAIN LOOKS TO SOUTHEAST

Swedish carmaker AB Volvo again is considering building cars in the southeastern United States.

Volvo, which scrapped plans in 1982 for a Hampton Roads vehicle assembly plant, is discussing a venture with Mitsubishi Motor Corp. to build cars and sport utility vehicles in North America.

Noting that BMW recently began assembling cars in South Carolina and Mercedes-Benz located a plant in Alabama, The Wall Street Journal reported Wednesday that possible sites for the new Volvo plant include locations in the southeastern United States.

``We are looking at different alternatives. There have been rumors for quite some time'' about a U.S. plant, Volvo spokesman Mats Edenborg told The Associated Press.

Edenborg declined to disclose possible sites. He said Volvo has ``had a lot of offers from local governments,'' but he emphasized that any ``decision would depend on other factors,'' such as proximity to suppliers.

Virginia state officials, asked if they were responding to Volvo's plans, declined to comment. ``It's not our policy to talk publicly about economic development projects,'' said spokesman Morgan Stewart of the Virginia Department of Economic Development.

Long before the wave of Japanese and German automakers built car assembly plants in the United States in the 1980s and 1990s, Volvo selected a 531-acre site in Chesapeake in 1973. Volvo began construction on the assembly plant but by 1982 had abandoned plans for a U.S. car plant.

Volvo GM Heavy Truck Corp., a joint venture that is 87 percent owned by Volvo, has plants at Dublin southwest of Roanoke and in Orrville, Ohio.

Current plans by Volvo for a U.S. expansion would follow in the tracks of German and Japanese carmakers, which have been attracted to the United States by the relatively weak value of the dollar, cheaper labor costs and the sales appeal of their cars, which use a wide array of parts made in the United States.

Another ``reason is tariffs,'' Edenborg said. ``If it costs too much to bring them into the country completed, then you have to set up manufacturing in the country.'' by CNB