Volvo is investing big on its first U.S. manufacturing factory, in a hope that Americans are buying more cars.

The Swedish car brand announced Monday that it will invest $500 million in a new manufacturing factory just outside Charleston, South Carolina. The plant, Volvo's first in the region, is expected to eventually produce 100,000 cars a year and employ 4,000 people down the road. The move intended to boost Volvo's business in North America and drive job growth.

“Building a plant in the US is a reflection of Volvo Cars’ commitment to the US and the key role the US plays in our growth objectives,” Lex Kerssemakers, Volvo's senior vice president of the Americas, said in a statement.

That's putting it lightly: since Volvo was acquired in 2010 by China's Geely Holdings, Volvo has prospered more in China, but fallen behind competitors in North America.

Volvo needs another market to grow in. The automaker's car sales fell 8% last year to 56,000 at a time when vehicle sales were surging thanks to favorable gas prices.

"The Volvo brand has been mostly neglected in the U.S.," says Eric Ibara, director of residual value consulting for Kelley Blue Book, who consults regularly with automotive manufacturers including Volvo. "It hasn't had a new product for a long time."

Other European automakers like BMW and Volkswagen have also doubled down on investing in U.S. manufacturing in recent years, which Ibara chalks up to a combination of factors: the U.S. automotive industry rebounding from the recession; an abundance of manufacturing talent ready and willing to work and hedging against currency fluctuations.

"The U.S. market must look great to investors," Ibara says, noting the number of vehicles sold in this market has climbed from 10 million in 2010 to a projected 17 million this year. "We've seen a very strong comeback with the automotive market."

Some analysts differ, however: Goldman Sachs economist Jan Hatzius pointed out in a recent research note that "the current sales pace [of cars] already looks high," and that licensed drivers are a shrinking portion of the overall U.S. population. "Our assessment of scrappage rates, population growth, licensed drivers, and vehicle ownership suggests that trend demand for autos—excluding cyclical fluctuations—is only 14-15 million units per year," Hatzius wrote.

One complication for foreign automotive companies operating plants in the U.S.: unions. Volkswagen, for example, has dealt with a months-long unionization drama among workers at its factory in Chattanooga, Tennessee.

Hakan Samuelsson, Volvo's CEO, shrugged off those concerns in comments Monday, characterizing the union issue in one statement as "not a relevant factor."