Entity to support Volvo's expansion plans in India
Volvo India Private Limited and SREI BNP Paribas have announced the formation of financial alliance recently in Bengaluru. The collaboration was announced by Mr. John. G. Rakocy, President, Volvo Financial Services and Mr. D.K. Vyas, CEO, SREI Equipment Finance. The alliance will be branded as Volvo Financial Services (VFS) in India.
Mentioning about the tie up Mr. Rakocy said, "The new alliance will enable Volvo to offer complete financial solution through SREI BNP Paribas thereby expanding the market presence of Volvo. Further, the collaboration will provide value to Volvo's existing customers in India allowing us to consolidate our market presence." Mr. Vyas said, "SREI Equipment Finance has been providing financial support for Volvo's construction equipment business, ever since the company launched its excavators in 1998 followed by the launch of motor graders and articulated haulers in 1999. The new collaboration will allow both companies to address new growth opportunities by developing co-branded financing programmes for customers of the Volvo Group and SREI BNP Paribas. "The alliance will be backed up by SREI's twenty-two years expertise in equipment finance, dynamic retail financial packages, asset base of over 12,000 crores supported by a strong national presence with a network of over 87 offices across India.
VFS is the global finance arm of the Volvo group-manufacturing construction equipment, trucks, buses, drive systems for marine and industrial applications, aerospace components and services and heavy diesel engines from 9-18 litres capacity.VFS was formed in 2001. Its headquartered is in Greensboro, North Carolina, USA with assets over $14 billion and presence in over 40 countries across Asia Pacific, Europe, and US.
Under the agreement, VFS-SREI will finance range of Volvo's products in India through its dealers. Mr. Vyas informed, "To support the alliance, SREI has set up a dedicated team to provide support to Volvo's dealers. The team will look after the disbursal of the finance and collection of the debt." He said, "Making the finance available, bankability of the project where the equipment is going to be deployed will be taken into account, projected cash flow from the project will be seen, the credit worthiness of the buyer will also be evaluated. There would be certain additional tests which the buyer opting to buy Volvo construction equipment would have to pass through. However, our broader objective will be to make the equipment affordable to the buyer. There would be provisions of leasing out the equipment as well."
The collaboration will also offer assistance to get the commercial vehicles financed pertaining to low and medium duty Eicher Trucks and buses in India with a range of 5-40 tons. Volvo has a joint venture with VE Commercial vehicles-a joint venture between Volvo group and Eicher Motors. VECV joint venture includes the complete range of Eicher's commercial vehicles, components and engineering design business as well the sales and distribution of Volvo trucks. The joint venture has over 7500 employees with sales and support network at 300 points in the country.
Mr.Rackocy said, Volvo will assist the alliance with SREI into a joint venture and is in the process of outlining a three year programme.
Speaking to NBM&CW on the sidelines of the event, Mr. A.M.Muralidharan, Managing Director, Volvo India Pvt limited said, "The tie up will provide benefit to our existing dealers by allowing them to provide financial support to retail customers and first time buyers of Volvo equipment. Significantly, the financial collaboration will facilitate our dealers in offering better parts and annual maintenance contract support. Not to mention, it will support proliferation of our new range of construction equipments which is very much in process." Volvo CE does business in India through a distribution network of 13 authorized dealers who operate through 102 service points and 50 service branches.