Geely-owned Volvo reported a slowdown in revenue from subscription, leasing and rental business, which decreased 30% year-on-year during the first quarter.

In the three months to March, the segment saw revenues of SEK 1.1bn (£97m, €104m), compared to SEK 1.4bn in Q1 2017, before the launch of the “Care by Volvo” all-inclusive subscription product in Europe.

Chief executive Håkan Samuelsson expressed confidence in the future potential of the product, which in the UK is currently only available in the London metropolitan area, on the V60 and XC40 models.

Care by Volvo, the hassle-free subscription service, will be the perfect alternative for the modern car owner,” Samuelsson said. “It will bring us closer to our consumers, and in the long run it will generate recurring revenue which will make our business more resilient against cyclicality.

In October, the Volvo group pointed to a digital subscription offer as the main route to market when its Polestar performance range launches in the UK in 2019.

Samuelsson said: “Volvo Car Group is no longer a traditional OEM. We have transformed our business and created a group structure that enables us to further capitalise on the consumer and technology trends that are reinventing the car industry.”

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Volvo’s car retail sales grew across most markets, recording a 16.3% increase in revenues for Europe, to SEK 29bn.

The UK was singled out as a notable exception, due to 9.4% fall in revenues to SEK 3.1bn. Volvo expressed uncertainty over Britain’s future consumer credit growth because of Brexit.

The group’s revenues reached SEK 56.8bn in Q1 2018, up 18.9% year-on-year. Operating profits were SEK 3.6bn, up 3.6%.

Last week, the group said it aimed for electric cars to constitute half of its total sales by 2025. It pointed to the Polestar brand as the future main driver for electrification in the group.

The group is also aiming to capitalise on the European roll-out of Lynk & Co, also owned by the Geely group. According to Volvo, it will be the first Chinese car brand to go global.