Volvo Financial Services, part of truck and equipment manufacturer Volvo Group, financed more than 53,000 units in the first quarter of 2018, a rise of nearly 10% compared to the same period last year.
The division funded 25% of group sales in markets where the business offers financial services.
New retail financing volume grew nearly 13% to SEK13.2 billion ($1.5 billion), with the net credit portfolio reaching SEK135 billion ($15.3 billion).
The business said its portfolio continued to perform well during the quarter, with low customer overdues and minimal credit losses in most markets.
Operating income increased 13% to SEK602 million (£68 million).
In February, Volvo Financial Services completed an asset-backed securitization transaction, under which SEK6 billion ($680 million) of securities tied to US-based loans on trucking and construction equipment assets were issued.
In addition, SEK2 billion ($230 million) of assets were syndicated in the quarter, reducing concentration risks and freeing up credit capacity to support sales.
Martin Lundstedt, president and CEO of Volvo Group, said: “Financial Services continued to increase the volumes of new financing on the back of increased deliveries of group products and stable penetration. Financing and other services are important parts of our total offer to customers and it is important to drive innovation in this area.”
Volvo Financial Services recently received an innovative technology award for a new mobile app that helps to speed up the quoting and credit approval process.
Overall, net sales at Volvo Group’s truck, engine and equipment divisions increased 16% in the first quarter to SEK89.1 billion ($10.1 billion), compared to the same period last year, based on a strong net order intake of trucks, which rose 29% to 71,965.
Net order intake of construction equipment increased 37% to 23,938.
Lundstedt said it has been a “good but challenging quarter”.
He added: “The increased volumes had a positive impact, but profitability was hampered by the transition to new trucks in North America and a continued strained situation in parts of the supply chain. What is encouraging is the great reception of these new trucks.
“Looking ahead, the strong order intake means that the supply chain constraints and associated higher costs will remain in the near-term. There is more to do to improve efficiency along the entire value chain. This will remain our focus for the coming quarters."
