Volvo Cars of North America is launching a captive this summer. CEO John Maloney calls Volvo Cars Financial Services "the biggest and most important thing we will do this year besides hitting our sales numbers."
The Swedish carmaker has not had an in-house finance arm since 2010, when Ford Motor Co. sold Volvo to Zhejiang Geely Holding Group of China.
In an interview with Automotive News Staff Reporter Diana T. Kurylko, Maloney, 50, made these comments about the finance arm.
You've added a captive finance arm. Why?
This goes to Volvo having stability and knowing where we want to be in the long haul. Part of that is a very important foundational issue for any car company and dealer body -- having a very efficient captive finance company. We did not have that since we departed from Ford.
We had a great bank relationship with U.S. Bank, but our ambition was always, if we could, to get back in the captive finance business. There are only three ways a car company makes income: selling cars, selling parts and finance.
It is important from a profit standpoint and it is equally important from managing your customer through their life cycle by controlling that data and that information stream. No matter how good these bank relationships are, you do not have full control of the customer data or the off-lease process.
It also offers us the opportunity to add some financial products. Bank of America will be our partner, but everything the customer sees will be Volvo Cars Financial Services.
What's the timeline?
There are two pieces. The commercial piece is floorplan and real estate -- late second quarter, 2012. The consumer piece, the leasing and the APR, is Dec. 1 of this year.
It is the biggest and most important thing we will do this year besides hitting our sales numbers. We announced it at NADA, and the dealers jumped up and applauded.