NEW YORK (TheStreet) -- Volvo Cars of North America, a branch of the Swedish automotive company owned by privately held Chinese firm Zhejiang Geely Holding Group, has picked South Carolina for the site of its initial U.S. manufacturing plant.

For Chinese automakers, the new Volvo factory marks the arrival of the first U.S. "transplant" manufacturing operation for light vehicles, much like the arrival of such operations run by a Japanese carmaker, Honda (HMC), in Marysville, Ohio, in the 1980s.

The new Volvo factory, which is scheduled to begin manufacturing cars in 2018, will be located in Berkeley County on the northern outskirts of Charleston. The move represents an investment of $500 million and will be Volvo's fifth plant, after two in Europe and two in China.

Zhejiang Geely's decision to locate a plant in the Southern U.S. came just a few days after Japan's Fuji Heavy Industries' (FUJHY) Subaru division announced an expansion of productive capacity in Lafayette, Ind.

Subaru, which has said it can't build enough cars to meet demand, is speeding up previous plans to expand its Indiana manufacturing facility to have the capacity to produce 400,000 vehicles annually.

"There are just not enough cars," said Yasuyuki Yoshinaga, president of Fuji Industries, in an interview with Automotive News. "If we only had more cars, we would be able to sell more."

Plans for the additional manufacturing capacity arrive just as the U.S. automotive market may realize its sixth straight year of rising new-vehicle sales. Following last year's sales of 16.5 million cars, pickups, minivans and crossovers, automakers have forecast sales of 16.7 million to 17 million this year, which would strain car plants.

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