Volvo Cars has signed a memorandum of understanding with Belgian and Flemish authorities for a package worth up to €119m (US$137m) to strengthen the competitiveness of its Ghent plant. The deal covers industrial, innovation and ecological measures alongside financing programmes, and opens the possibility of contract assembly for vehicles from other brands.

The Ghent facility is one of six Volvo Cars production sites globally, alongside plants in Gothenburg, South Carolina and China. Combined with the automaker’s own efficiency actions, the package is designed to secure sustained manufacturing activity at the Ghent site.

Volvo Cars sold more than 710,000 vehicles in 2025, with an electrified share of 46%, though the company has faced growing pressure to address plant-level competitiveness as European electric vehicle demand evolves. Contract assembly for third-party brands is described as a possible outcome that could boost site utilisation and regional industrial activity.

The Ghent agreement reflects a wider European pattern of state support for automotive manufacturing as OEMs face the structural pressures of electrification. Both governments described the arrangement as protecting long-term advanced manufacturing employment in the region.

In a statement, Håkan Samuelsson, President and Chief Executive of Volvo Cars, said: “Volvo Car Gent is a highly capable plant with an experienced team. With these necessary improvements in competitiveness, we are strengthening its future as a car plant in Belgium.”

Source: Volvo Cars