Transportation equipment manufacturer Traton Group is upgrading financial services across its truck and bus brands to meet consumer needs.
Traton Financial Services, which includes Scania Financial Services, MAN Financial Services, International Financial and Volkswagen Truck & Bus Financial Services, is undertaking a strategic shift to meet the parent company’s needs, Christian Levin, chief executive of Traton SE, said during the company’s Oct. 1 Capital Markets Day presentation.
Traton SE, a subsidiary of Volkswagen Group, which is itself a subsidiary of Porsche SE, is the parent and holding company of the Traton Group.
Firstly, Traton Group and Traton Financial Services plan to recreate the Scania brand’s success over the past 20 years for its entire product base, while also adding bundled services, Levin said.
The company wants to offer “not only financial services as a basic leasing product, but all the tailor-made solutions that include and enable bundling because bundling is really the name of the game, and that is what our customers are asking for: one invoice solution where you have everything included from your brand on it,” he said.
“It will be different delivery models depending on how we work at the front end, and I think that’s really good because we are in competition on the front end, so it’s going to be branded by the respective brand on the front,” he added.
Traton Financial Services updates
Traton Financial Services plans to use its 17.6 billion euro ($19.5 billion) in assets under management to support the development of the new captive finance model and U.S. and global expansion, Johan Haeggman, CEO of Traton Financial Services, said during the presentation.
“A captive finance company in a commercial vehicle industry is a strategic cornerstone,” he said. “This structure will be the lever and the backbone for bringing on the other brands into the operations, so we are building a multi-brand, forward-integrated captive financial solution.”
Traton Financial Services also intends to take vehicle subscriptions onto its balance sheet as more customers move toward that model, Haeggman said.
“Subscription, whether you call that vehicle-as-a-service or whatever you call it, someone needs to own that vehicle, then we are there and we are ready to take on that challenge as well,” he said. “We are a strategic platform for Traton going forward with its new business models.”
Lastly, as the captive lender shifts its approach, Traton Financial Services is also looking to acquire more diversified and local funding, Haeggman said.
Additionally, Traton Financial Services’ funding source mix as of June 30’s most recent data consisted of 66% capital markets, 13% asset-backed securitizations (ABS), 13% bank loans and 8% other, according to the presentation. By 2029, the lender intends to shift its funding source mix to 45% capital markets, 25% ABS, 20% bank loans and 10% other.
Editor’s note: All amounts have been converted to U.S. dollars.
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