Volvo Cars plans to spend about $500 million to build a new U.S. manufacturing facility, as it attempts to compete as "a true global car maker," its chief executive announced.

Volvo will announce the location and construction timetable for the facility at a later date, according to a release. Volvo has developed a short list of possible locations.

The plant would begin production is 2018 with a capacity of up to 120,000 autos that will use the underpinnings of the redesigned XC90 luxury SUV, Volvo's head of manufacturing told Bloomberg.

A U.S. factory would give Volvo a presence on three continents including its two factories in Europe and two in China. The announcement comes on the heels of announcements from several other automakers about expanding U.S. capacity. Mercedes-Benz plans to invest $500 million in a new van plant in Charleston, S.C., to build the next-generation Sprinter. Volkswagen has begun expanding its plant in Chattanooga, Tenn., to build a new mid-size SUV for the U.S. market.