Volvo eyes U.S. captive finance unit

WASHINGTON -- Volvo may form a captive finance arm in the United States as part of a push to expand U.S. sales, Volvo CEO Stefan Jacoby said last week.

"We're investigating creating a captive finance arm in the U.S.," Jacoby said in an interview after a Washington conference co-sponsored by Volvo. "We're committed to increasing sales here." He said a decision probably would come by year end.

Volvo's formation of a captive finance business most likely would involve a joint venture with a bank or other financial services institution, he said.

Tamara Darvish, whose family owns a Volvo dealership in Rockville, Md., said a Volvo captive finance unit would be better than a bank for dealers because the automaker "would have more skin in the game."

"It would work more closely with dealers," she said, adding a captive finance unit could give dealers access to better floorplan financing as well as more competitive new-vehicle loans and leases. "Banks could care less."

Jacoby added that the company plans to strengthen its dealer network but didn't provide details. He recently met with Volvo dealers in Miami.

Volvo's U.S. dealership ranks have been trimmed to 315, from 365 in 2008.