Transport and infrastructure solutions major Volvo group Wednesday announced a strategic alliance with leading construction equipment finance firm Srei BNP Paribas to offer a range of financial services, including loans to customers of its commercial and construction equipment vehicles.
The alliance will enable existing and prospective customers of Volvo’s two Indian subsidiaries selling trucks and luxury buses and its joint venture with Eicher group for commercial vehicles and Srei to avail credit, sales and marketing expertise and logistics support.
“The game-plan is to set up a full-fledged financial services joint venture with Srei over the next three years and capitalise on the growth opportunities in the Indian sub-continent, which is riding on a high economic growth,” Volvo Financial Services (VFS) president for Asia-Pacific region John Rakocy told reporters here.
The alliance envisages the partners to develop co-branded financing programmes and services for their customers.
“Our subsidiaries and distributors will benefit from leveraging Srei’s expertise and financial capabilities in credit underwriting, funding and sales and marketing through the private label programme,” Rakocy added.
With 33 percent market share in infrastructure and construction equipment financing, Srei is a joint venture between Srei Equipment Finance Ltd and BNP Paribas, the European global banking and financial services firm.
“Though we have been financing Volvo group products since its foray into India over a decade ago, this formal association will complement each other’s strength to increase our market share and participate in the country’s growth story,” Srei chief executive D.K. Vyas said.
With an asset base of Rs.12,000 crore and a network of 87 offices across the country, Srei will provide complete financing solutions to customers buying Volvo products ranging from trucks, buses and construction equipment.
Growing at 30 percent, the commercial and construction equipment vehicle sector registered record sales of $5 billion in fiscal 2010-11, as against $10 billion by the passenger car segment.