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August 3, 2009updated 12 Apr 2017 4:34pm

Volvo FS reports wider losses as repossessions and delinquencies rise

Volvos finance arm reported an operating loss of SEK 296 million (28.7 million) in the second quarter of 2009, as the amount of new business collapsed and customers in all markets struggled to meet their obligations In line with the parent company, which posted deeper-than-expected Q2 losses at SEK 6.9 billion (compared with an operating income of 7.2 billion in 2008), Volvo FS was hit in all regions and markets where it operates.

By Antonio Fabrizio

Volvo’s finance arm reported an operating loss of SEK 296
million (€28.7 million) in the second quarter of 2009, as the
amount of new business collapsed and customers in all markets
struggled to meet their obligations. 

In line with the parent company, which posted
deeper-than-expected Q2 losses at SEK 6.9 billion
(compared with an operating income of 7.2 billion in 2008),
Volvo FS was hit in all regions and markets where it operates.

“In Western Europe customers are challenged by the substantial
reduction in economic activity leading to an increasing level of
delinquency and repossessions,” the company said.

It added that in markets such as Spain the widespread economic
slowdown had clearly impacted portfolio performance, whereas in
Eastern Europe there had been no improvement since the first
quarter as many countries continued to experience a steep decline
in economic activity.

“This means that customers in many segments struggle to meet
their obligations and require long term assistance in the form of
restructured financing to continue operations,” Volvo said.

New financing volume in the second quarter of 2009 amounted to
SEK 7.9 billion, decreasing by 41 percent compared to last
year.

In total, 6,922 new Volvo Group units were financed during the
quarter, compared with 13,327 in the same period in 2008.

Antonio Fabrizio

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