Volvo Cars has grown revenues from subscription, leasing and rental business to SEK 3.3bn (£284m) in the six months to June, up 17% year-on-year.
For the second quarter of the year, revenues jumped almost 60% to SEK 2.2bn. This offset a noticeable slowdown during Q1, when leasing revenues were 30% lower than a year earlier, bringing in just SEK 1.1bn.
Geely-owned Volvo has been at the fore of a wave of new finance and mobility products that swept the consumer car industry over the past year. It was one of the first OEMs to tap into the car subscription model with its “Care by Volvo” package, and intends to introduce the Polestar performance brand to Europe on an online subscription-only basis.
Volvo said Care by Volvo saw “good demand” in the US, and was ” also attracting new younger consumers to our brand”. The company wants subscription contracts to account for half of retail volumes by the mid-2020s, “building over 5 million
direct consumer relationships”.
“We see this concept coming more and more [to the fore], and we are in the fortunate position to be drivers in this areas, because we are a growing company,” Volvo chief executive Håkan Samuelsson said during the H1 results presentation. “It’s much easier to transform when you grow than when you’re static.”
Earlier this month, Volvo revealed plans for a car-sharing app named “M”, which would make it a competitor to Daimler’s and BMW’s soon-to-merge mobility businesses. Volvo said it would seek a “premium” mobility customer base, signalling it may go beyond a pick-up, drop-off car club like Zipcar and DriveNow.
At group level, Volvo reported a 27% increase in net revenues for H1, to SEK 66bn, and a 28% increase in earnings before interest and tax (EBIT), to SEK 4.2bn.
Global sales volumes reached 317,600 vehicles, up 14%. The company said it saw increased demand for cars, driven by SUVs, in all European markets with the exception of the UK.
“We are very firm on our mid-term objective of reaching 800,000 cars [annually],” said chief financial officer Hans Oscarsson. “We have just recently launched everything [in our lineup] and the system now needs to harvest [on that].”