Volvo 2000 Annual Report Download - page 44

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42
THE VOLVO GROUP YEAR 2000
Financial Services
Financial services are a significant part of Volvo’s strategy to become the
world’s leading provider of commercial transport solutions. The Financial
Services business area was established during the year to handle Group cus-
tomer-financing operations, the insurance business, treasury activities and real
estate operations. The aim is to focus on developing various types of financial
services, primarily related to Volvo’s products and services.
Financial Services fulfills the market’s growing need for increasingly
sophisticated financial solutions, separately or combined with insurance
and/or service contracts. This strengthens the competitiveness of Volvo’s
dealers as well as enhancing the Group’s growth and profitability.
Volvo’s customer-financing operations cover Europe, North America, part
of South America and Australia. Customer financing is primarily truck-relat-
ed, although buses and construction equipment are included to an increasing
extent. The range of financing services includes installment contracts, finan-
cial leasing, operational leasing and dealer financing. In most markets, insur-
ance, service and maintenance contracts are also offered separately or in com-
bination with financing services.
Operations
Operations continued to expand strongly during 2000, though at a slower rate than in the pre-
ceding year. Since year-end 1999, the credit portfolio has grown by SEK 8.5 bn, amounting to SEK
53.6 bn at year-end 2000. The credit portfolio consisted of approximately 111,000 contracts of
which approximately 91,000 related to Trucks.
The total volume of new financing in 2000 amounted to SEK 20.6 billion, of
which SEK 15.5 billion (75%) pertained to financing of Volvo trucks. 31% (26)
of all new trucks sold in 2000, in markets where Financial Services offers financ-
ing, were financed by Financial Services. During the year, financing of Penta
engines was launched and a company for financing aircraft engines was started.
Volvo’s insurance operations developed strongly during the year, and in North America a com-
plete set of transport-related insurance products are offered to the customer. Together with Volvo
Action Services, an integrated claim process is offered in the U.S., which minimizes customers’
downtime in case of accidents.
The real estate operations, conducted primarily through leasing and development of commer-
cial properties in Göteborg, Sweden, expanded further in 2000, and the year-end leasing rate was
▲
New business area
within Volvo