Expansion into new markets
Financial solutions are vital to the Volvo Group. They increase customer satisfaction, competitive advantage, profitability and growth. Financial Services offers traditional financial services and dealer financing. In many markets, insurance, rental services and other offerings are also available.
In 2007, Volvo Financial Services (VFS) enjoyed great success in its slightly more than 50 markets, where it functions as the leading supplier of financial solutions to the Group’s customers and dealers. The company has achieved this success through its dedicated business teams who know the Group's products better than any other bank or finance company. Their goals are to integrate VFS's activities more closely with the sales processes of the business areas, enhance the depth and breadth of the product offering and develop the supply of services to key accounts. As a result of this, VFS achieved higher levels of profitability, penetration and assets, while keeping credit losses and write-offs to historically low levels during the year.
Thanks to strong demand in 2007, several milestones were achieved and changes implemented, including the approval to establish customer finance companies in Chile, Hungary and Slovakia.
VFS launched new finance programs for the Group’s latest two acquisitions, Lingong and Ingersoll Rand's Road Development division, at the same time that discussions were held with Nissan Diesel to investigate new financing opportunities in Japan and other parts of Asia.
In Europe, VFS reorganized its market approach in order to increase customer satisfaction and deliver stronger support to the individual Business Areas and brands supported by VFS. In the mature markets, Financial Services reduced its equity ratio to 8%, thereby freeing up capital for the Group.