Volvo Eyes Financial Services for Future Growth

Polestar 1

Volvo Financial Services is still an “untapped potential” for Volvo Group and is key to deepening the relationship with customers, Chief Executive Martin Lundstedt said in the OEM’s third-quarter earnings report last Friday.

“Volvo Financial Services delivered a good return on equity with low credit losses,” he said. “Financial services are key in our work to deepen the relationship with customers, and there is still an untapped potential for VFS to increase the sales of financing and insurance packages for Group products.”

Volvo Financial “delivered a good return on equity with low credit losses,” according to the report. The return on equity was 14.3% for the first nine months, a year-over-year increase of 1%. The global number of financed units in 3Q17 was 12,571, up from 12,010 the same time a year prior.

Volvo recently unveiled a new subscription program for its new Volvo XC40, and will also extend that to the new Polestar 1 released last week — a 600 horsepower electric sports car — in an attempt to rival Tesla’s stronghold on the high-performance EV market.

The vehicle is offered in a two- or three-year subscription. Everything from test drives and ordering, to on-demand services like car-washes and a valet, will be handled through a dedicated Polestar app, according to a published report. Polestar 1 is also completely keyless and will have a virtual key through a consumer’s phone. Additionally, the car will be completely separate from Volvo showrooms, but Volvo dealerships will handle maintenance and servicing of Polestar vehicles.

“Customers feel, to take the next step, you must work closer in a partnership with more advanced technology,” Lundstedt said, adding, “so I think to some extent we will streamline the sales.”

For more content like this, check out the 17th annual Auto Finance Summit, which will take place on Oct. 25-27 at the Wynn Las Vegas. To learn more about this year’s event — or to register — visit the Summit’s homepage here.

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