FINANCE: The involvement of Volvo Financial Services and its deep understanding of Volvo customers and their industries can help support sometimes difficult purchasing decisions

by Cathy Smith   


There is no doubt in Scott Rafkin’s mind that the availability of in-house Volvo financing can be a deal-maker when it comes to selling construction equipment.

Rafkin, who has been global president of Volvo Financial Services (VFS) since July 2014, says most customers need some sort of loan or lease and cannot afford to simply lay out cash.


“VFS provides customer financing in 43 countries around the world where approximately 90% of Volvo Group sales are transacted,” he says. “We want to become a primary reason that a customer is able to purchase a Volvo product.”



Rafkin acknowledges that as a captive company and a premium financial service provider, VFS cannot compete with the interest rates offered by many independent banks or finance companies. But, he says, customers have other priorities.


“Our value proposition and competitive advantage is speed, expertise, and knowledge of both our customer’s business and the product we are financing.


“We don’t just go to customers and say ‘Here are our financial terms, take it or leave it’. We take the time to understand their needs and to structure solutions.”


Fourteen hundred people work for VFS worldwide and Rafkin says his team really understands that the financial services they provide are shaping the future.


“Our work impacts society and people’s lives,” he says. “We help companies big and small, and through a deep understanding of a customer’s business model – right down to details such as when and how equipment is used – VFS tailors a financial product that can support companies through the seasonal peaks of their business cycle.”


Rafkin cites the United States as a good example of a market that went through a steep downturn through the economic crisis but where VFS was able to work with customers and dealers through that period to ensure the sustainability of their businesses.


“We were there in the difficult times as well as the good times and, as a result of that, our customers and dealers have a strong sense of loyalty to VFS and the Volvo Group.”


Rafkin is keen to dispel the idea that VFS, founded in 2001, is purely a financing operation. He says it is not all about making money, although the captive company does, of course, have to meet profitability targets set by the Volvo board.



“We need to make money as a business area for the Volvo Group but our main objective is to support sales. That is our reason for being but does not mean that we take unreasonable risks or price our products inappropriately. When we do this effectively, I expect VFS to have a strong number one market share in every market where we operate.”


Rafkin admits that heading up a part of the Volvo Group which represents more than a third of the Volvo Group’s balance sheet is a big responsibility.


Headquartered in the US city of Greensboro, North Carolina, VFS has a portfolio of customer and dealer accounts worth about US$18 billion, around a third of which is in construction equipment. That portfolio ranges from an operator buying one single machine to a large fleet customer running hundreds of machines in multiple industries.


The aim of VFS is to integrate the financial package through Volvo Group dealers at the point of sale, so that the overall purchase is as straightforward for customers as possible. For Rafkin it is about more than just earning the first sale. He says VFS is interested in the “total life cycle” of customers and machines and that the company’s relationship with customers during the entire period of a lease or loan is an opportunity to drive loyalty to the Volvo brand in the future.


“Our customers tell us that a positive experience with VFS can be a significant influence on whether or not they buy a Volvo product in the future.” And, he adds with a smile: “Hopefully then they will also finance the product with Volvo Financial Services.”