Volvo 2002 Annual Report Download - page 24

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22/23
Business Areas
Financial Services
Volvo Financial Services (VFS) provides
services in five main areas: customer
finance, treasury operations, insurance
services, real estate management and
other services. Financial services are a
significant part of Volvo’s strategy for
becoming the world’s leading provider of
commercial transport solutions. Financial
services also fulfill the market’s growing
need for increasingly sophisticated finan-
cial solutions, separately or combined
with insurance and/or service contracts.
They increase the competitiveness of
Volvo’s dealers and the attractiveness of
their products, thereby enhancing the
Group’s growth and profitability.
During 2002, the new portfolio man-
agement strategies that were introduced
in 2001 to the customer finance business
took hold and produced sound results. As
a result, a foundation for controlled
growth and improved profitability has
been successfully laid. VFS also forged
closer ties to Mack and Renault Trucks.
Both manufacturers now enjoy custom-
branded finance programs. VFS benefit-
ed in 2002 not only from the increased
volume and diversification of Mack and
Renault Trucks, but also from greater sta-
bility within the US truck portfolio.
The customer in focus
Volvo’s customer-financing operations
cover Europe, North America, Australia,
parts of South America and Asia. Customer
financing is primarily truck-related, although
Buses, Construction Equipment, Volvo Aero
and Volvo Penta financing are included to
an increasing extent. The range of finan-
cial services includes installment con-
tracts, financial leasing, operational leas-
ing and dealer financing. In most markets,
insurance, service and maintenance con-
tracts are also offered separately or in
combination with financing services.
The total volume of new retail financing
in 2002 amounted to SEK 26.3 billion,
which was SEK 3.7 billion higher than the
same period last year. The main driver
behind the growth in volume was Mack
and Renault Trucks, which accounted for
23% of the retail volume in 2002 com-
pared with 6% in 2001.
In the markets where financial services
are offered, the average year-end pene-
tration was 27% for Volvo Trucks, 23%
for Buses, 22% for Construction Equip-
ment, 12% for Renault Trucks and 10%