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49
its customers. Together with Volvo Action
Services, an integrated claim process is
offered in the US, which minimizes cus-
tomers’ downtime in case of accidents.
Danafjord, VFS’s real estate company, saw
a further expansion in 2001. The operation
mainly covers the leasing and development
of commercial real estate in Göteborg,
Sweden and corresponds to about 20% of
the total real estate holdings of Volvo. There
is also an agreement with Ford to administer
the real estate of Volvo Car Corporation in
Göteborg. The occupancy rate at the end of
the year was 98% (95), and 61% (56) of the
total leasing was for tenants outside of the
Volvo Group. 41% (40) of the lease agree-
ments run for five years or more.
Volvo Treasury’s value added is generated
through management of the Volvo Group’s
assets and liabilities, and foreign exchange
operations. During the year, Volvo Treasury
placed high focus on creating competitive
funding solutions for the customer financing
companies. The integration of Renault and
Mack into the Group’s financial infrastruc-
ture was also a major activity.
Financial performance
Operating income amounted to SEK 325 M
(1,499) and was stable in the European cus-
tomer-financing companies. However, oper-
ating income was negatively affected by
increased credit losses from truck financing
in North America. At the same time, income
from operations in South America and
Eastern Europe was higher than in prior
years.
Provision is made for both credit risks and
residual-value risks to the degree that resid-
ual-value risks are attributable to the cus-
tomer-financing companies. For customers
unable to fulfill their contractual obligations,
specific provisions for credit risks are made
based on an individual assessment of each
contract. In addition, in accordance with
established policies, provisions are made for
estimated credit-losses for each customer-
financing company.
At the end of December, total credit
reserves amounted to 2.9% of the credit
portfolio compared with 2.3% at the end of
December 2000. The total write-offs for
2001 amounted to SEK 823 M (411).
Ambitions for 2002
In 2002,VFS will place emphasis on measur-
ing and improving the performance of its
customer finance portfolio, growing organi-
cally from the Mack and Renault brands,
building closer ties with key customers,
developing new IT and e-commerce systems
and improving productivity. The effects of
the economic climate will continue to be
monitored so that financial risks and oppor-
tunities can be professionally managed.
Distribution of credit portfolio, net
%1999 2000 2001
Commercial products
Operational leasing 25 23 23
Financial leasing 29 28 27
Installment contracts 29 34 36
Dealer financing 16 14 14
Other customer credits 1 1 0
Condensed income statement
SEK M 1999 2000 2001
Net sales 8,637 9,678 9,495
Income after
financial items 1,066 1,499 325
Taxes (316) (471) 10
Net income 750 1,028 335