Volvo Financial Services’ new business volume, credit portfolio jump in 2023

Volvo Financial Services posted an increase in new retail business volume in 2023 as the captive’s penetration rate slipped. 

The Volvo Group subsidiary registered a new retail financing volume of 118 billion krona ($11.3 billion) for the full year, up 14.1% from $9.9 billion in 2022, according to the Swedish firm’s earnings supplement. 

New retail business volume in Q4 increased 12.7% year over year to $3.3 billion.  

Behind the Numbers  

• The number of financed units on a 12-month rolling basis sat at  68,027  at the end of 2023, representing a 27% penetration rate. That’s down from a 12-month rolling average of 68,658 units in 2022, representing a 28% penetration rate. 
• Volvo Financial Services’ (VFS) credit portfolio, exclusive of Russian and Belarus operations, grew 18% YoY to $24.3 billion. The company’s credit portfolio includes bus, construction equipment, engine and truck segments.  
• Credit reserves as a percentage of the portfolio, excluding Russian and Belarus operations, landed at 1.37%, down from 1.6% at the end of 2022. 

Expanding leasing options  

VFS also launched a usage-based leasing product for Mack MD electric models in the quarter, according to the earnings presentation.   

“To help customers more easily adopt better electric vehicle technology into their fleets, Mack [is] now also starting to offer usage-based leasing arrangements for medium-duty electric models, and that is then combined VFS and Mack trucks, so also a very important step now for the North American market,” Volvo Group Chief Executive Martin Lundstedt said during the company’s earnings call today.  

Volvo did not respond to Equipment Finance News’ request for additional comment on the lease product by publication time.   

Shares of Volvo [OTC: VLVLY] were trading at about $24.21 as of market close Friday, up 0.98%, or 3 cents from market open. Volvo has a market capitalization of $49.1 billion.  

Editor’s note: All figures have been converted to U.S. dollars.  

Registration is now available for Equipment Finance Connect. The dealer-centric equipment lending and leasing event of the year offers opportunities for dealers to learn new strategies, foster valuable partnerships and emerge with ideas to immediately apply to their businesses. Learn about free dealer registration at EquipmentFinanceConnect.com.