A look at the finance environment in the trucking industry
1 DRIVER'S DIGEST A LOOK AT THE FINANCE ENVIRONMENT IN THE TRUCKING INDUSTRY TWO YEARS AND COUNTING... In the summer of 2007, the trucking industry in North America faced an economic slowdown. Since then, customers, manufacturers, dealers and fi nance companies all experienced stagnant business results. Today, demand for trucks remains depressed and residential real estate is still in a recession. The fuel price decline in late 2008 provided some relief and government stimulus packages indicate better times ahead; however, most customers still feel pressure to keep operating costs at a minimum. Today, the business environment continues at relatively fl at or low stabi-lization levels and the fi nancial services industry is amidst considerable challenges. However, I believe that the secret to success in this downturn is getting the basics right; which means continuing to build on our customer relationships, and provide stability through a comprehensive fi nance and insurance offering to Volvo dealers and customers. STRENGTH IN NUMBERS Because the economic climate brought with it a credit crunch, many lend-ing sources continue to tighten credit standards or exit the business in cer-tain markets. Credit availability is limited for trucking customers of all sizes. When market stability is an issue, the role of a captive fi nance company (one affi liated with the truck manufacturer, such as Volvo Financial Services) is even more appealing to customers because a captive is often better positioned to lend. Due to a captive's years of dedication to the equipment industry and its brand, a captive is typically better prepared for all points in the business cycle, enabling it to continue providing capital to customers with well-established businesses. This very challenging business environ-ment makes it diffi cult for many customers to obtain fi nancing. Fortunately, Volvo Financial Services remains in a strong position to continue offering fi nancing to customers purchasing Volvo trucks. One thing is clear about challenging times. They encourage us to work harder to fi nd ways to support each other and generate business. Working closely with Volvo dealers and customers early in the sales process, and throughout the customer's ownership experience, is a critical step to provid-ing value-added fi nancing that addresses the customer's needs. We must help one another through the downturn and remember that at the end of the day, it's really all about our customers. We must help one another through the downturn FROM THE DESK OF... Tom Guse VP U.S. Truck Financial Services Volvo Financial Services