Volvo CE: No financing disruptions with recent acquisition, sale
Volvo acquired Swecon for $735M, sold SDLG for $836.6M
Volvo Group anticipates no financing disruptions for customers following its acquisition of Swedish dealer group Swecon and divestiture of Chinese OEM Shandong Lingong Construction Machinery this week.
Volvo Construction Equipment acquired Swecon’s operations in Sweden, Germany and the Baltics for $735 million, strengthening its retail presence in key European markets and reinforcing retail as a core strategic focus for Volvo CE, according to a June 24 Volvo release.
The firm is also divesting its 70% stake in China-based Shandong Lingong Construction Machinery (SDLG) for $836.6 million, as part of a sharper focus on premium Volvo-branded segments in China while continuing to use its facilities there as a production and development hub, according to a separate June 24 release.
Volvo does not expect the moves to change its financing operations, a company spokesperson told Equipment Finance News.
Dealer, customer financing unchanged at Swecon
Volvo intends for Swecon dealer financing and customer financing to stay the same, the spokesperson said.
Customer financing will continue to be managed by Volvo Financial Services (VFS) or external banks, according to the spokesperson.
“VFS is responsible for the group captive finance strategy and leasing portfolio, and this acquisition will not impact their strategy,” they said. “Swecon rental operations will continue to be managed by the local Volvo CE entities.”
Separate SDLG, Volvo financing
SDLG and Volvo CE will continue to offer separate financing solutions to their dealers and customers following the divestiture, the spokesperson said, adding that Volvo and SDLG products use different channels and options.
SDLG has third-party financing solutions and in-house financing as its main channels while “Volvo relies mainly on VFS to provide financing solutions to end customers,” they said.
“We are introducing the concept of equipment-as-a-service, where Volvo CE guarantees machine uptime to the customer,” the spokesperson said.
Volvo also expects no effect on other financing practices and instruments, such as cross-border financing and export-backed leasing, the spokesperson said.
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