In addition to vehicles and machines, the Volvo Group’s offering includes various types of financing solutions, insurance, rental services, spare parts, preventive maintenance, service agreements, assistance services and IT services. The range and flexibility of the offering means that the solutions can be customized for each customer.
Since a large part of the offering within the aftermarket business is requested as long as products are being used, they contribute to balancing the fluctuations in the business cycle for the Group. By strengthening the aftermarket offering, profitability and revenue sustainability can improve for the Group throughout the business cycle.
The strategy to increase sales of services and aftermarket products is an important element in the Volvo Group’s effort to achieve targets for profitability and growth, both in mature markets and in the Group’s new markets. During 2011, the services and aftermarket products business (soft products) represented approximately 23% of net sales in the Industrial Operations compared to 27% in 2010. The extended product offering such as used vehicles and machines, trailers and superstructures and special vehicles were previously defined as soft products. Starting January 1, 2012 these are instead defined as hard products. The numbers above and in the pie chart Soft product share of Industrial Operations' net sales 2011 reflect the new definition and the comparison numbers have been restated.