Personal Touch to Commercial Automotive FinancingMon, 09/01/2014 - 13:04
Q: What are the main pillars of your portfolio of financial services in Mexico?
A: Volvo Financial Services is the financial services arm for the Volvo Group worldwide, offering financial services to its dealers and customers. Volvo Financial Services has been in Mexico for 15 years with finance products like floor plan financing to the dealers and installment credits and leases to the final customers. The financing needs and profile of each customer are different. In the truck segment, most customers utilize our financing in order to purchase a truck. Volvo Financial Services helps customers identify a full solution plan because they prefer to work with captive finance companies and avoid dealing with banks. The bus segment is a bit different as 60-70% of the market is focused on corporate customers who do not need financing most of the time.
Q: How do you customize your financial services for customers with differing profiles and needs?
A: Volvo Financial Services needs to know the profile of our customer in order to design the right product for each of them. We provide an assessment to guide them towards the best fit. We often receive clients who need financing but are not sure which financial product is best for them. However, after assessing their personal financial situation, we are able to find the best solution for each company.Some could need a grace period or maybe seasonal payments. We do try to tailor our services to each segment and each customer’s needs, and therefore only sometimes launch a general plan. Volvo Financial Services knows the transport market whereas banks are not as knowledgeable about the specific needs and requirements of the different market segments. With banks, the credit approval process could take more than one week. With us, once the credit file is completed, the approval process only takes from two to five days, depending on the size of the credit.
Volvo Financial Services also has an advantage in that we know the customers, and in the majority of cases we have a very close relationship with them. If a customer is facing financial difficulties and they prefer to come to a friendly agreement with us in order to avoid getting involved in a legal process, we work with the customer to determine a solution for this situation.
Q: Why should your clients choose new vehicles rather than cheaper, older vehicles imported from the US?
A: Transport companies know they need new equipment to save on maintenance costs and this mentality has become wide-spread. Moreover, big companies demand that operators do not have fleets older than ten years in order to ensure on-time delivery. It is true that owner-operators still do look to import used vehicles. In the long-term, the gasoline subsidy will slowly be taken away, and the only way to avoid paying extremely high gasoline prices is to have a new model of vehicle that is more efficient. Moreover, the legal process for importation is lengthy and expensive.