Volvo 2001 Annual Report Download - page 52

Download and view the complete annual report

Please find page 52 of the 2001 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

48
Financial
Services
Financial services are a significant part of
Volvo’s strategy for becoming the world’s
leading provider of commercial transport
solutions. To that end, in early 2001 Volvo
formed Volvo Financial Services (VFS) as a
separate business area by uniting the
Group’s customer finance, treasury, in-
surance, real estate and related services com-
panies. In elevating VFS to the status of a
new business area within Volvo, Volvo
addressed the market’s growing need for
customer-focused, integrated financial solu-
tions. As a diversified financial services com-
pany, VFS is dedicated to enhancing the
competitiveness of Volvo and its dealers,
thereby increasing shareholder value.
During 2001, VFS sharpened its financial
strategies, streamlined its organization and
strengthened its management capabilities.
From a strategic perspective, a series of
building blocks were implemented to
enhance VFS’s global performance. Chief
among these were a streamlined organiza-
tional structure, a new pricing model, and an
emphasis on global risk management and
operational efficiency. It is anticipated that
these various moves will provide VFS with a
platform for controlled growth and
improved profitability in the years ahead.
The customer in focus
Volvo’s customer-financing operations cover
Europe, North America, Australia and parts
of South America and Asia. During 2001,
the financial offering has been expanded to
include Renault and Mack trucks. Customer
financing is primarily truck-related, although
buses, construction equipment, Aero and
Penta financing are included to an increasing
extent. The range of financing services
includes installment contracts, financial leas-
ing, operational leasing and dealer financing.
In most markets, insurance, service and
maintenance contracts are also offered
separately or in combination with financing
services.
Operations continued to expand during
2001. Since year-end 2000, the credit port-
folio has grown by SEK 10 billion, amount-
ing to SEK 64 billion at year-end 2001.
Excluding currencies, the portfolio growth
was 9% (14). Some 66% of the portfolio was
related to Volvo truck financing, 15% to bus
financing and 14% to construction equip-
ment financing. The remaining 5% is related
to financing of Renault, Mack and the other
business areas. Geographically, about 21% of
the customer finance portfolio is related to
the US truck market. Future growth within
VFS is expected mainly from financing
Mack and Renault products along with
increased financing opportunities within
Volvo’s other business areas. The credit port-
folio consisted of approximately 124,000
contracts of which approximately 97,000
related to Trucks.
The total volume of new financing in
2001 amounted to SEK 22.6 billion (20.6),
of which SEK 14.8 billion (15.5) or 66%
(75) pertained to financing of Volvo trucks.
30% (29) of all new Volvo trucks sold in
2001, in markets where VFS offers financ-
ing, were VFS financed.
Volvo’s insurance operations continued to
show strong development during the year
throughout both North and South America.
The North American insurance operations
offer transport-related insurance solutions to
01
Assets, SEK bn
009998
66.556.543.2 73.5
00
Credit portfolio,
SEK bn
9998 01
53.645.135.4 64.0
98 99 00 01
Return on share-
holders’ equity, %
8.9 12.0 14.1 4.2
98 99 00 01
Market
penetration, %
27 26 29 30
BUSINESS AREAS