Adaptation the Critical Factor in Mexico’s Car Insurance Market

Q: How is GarantiPLUS adapting to the growing trend of second-hand vehicles in Mexico?

A:  GarantiPLUS is adapting to this new business model, especially because the pandemic changed the way we do business. This has also had both a positive and negative affect on both the distribution and manufacturing sectors. There has been a reevaluation of the segment because production for new cars has decreased and, as a result, values in the second-hand vehicle market have risen. This has also led to a financial cost for distributors. At GarantiPLUS, we are looking at that market to provide clients with full non-deductible coverage that has been lost due to the car’s age or mileage.

Q: What differentiates GarantiPLUS from other businesses in the sector?

A: In Mexico there are only a few companies like ours that offer these types of services. GarantiPLUS has been operating for the past 12 years worldwide and in Mexico since 2017. Our staff has many years of experience working in the automotive sector. One of our advantages is that our pricing model is very simple, and our prices are very affordable. This is possible, because all the data based experience of Garantiplus, We also have a business model that allows our distributors to generate additional revenue, especially through products that have an added value, such as ours. 

Q: What is the latest news on semiconductors? 

A: The industry still have issues, although to a lesser extent. Today, most assembly plants that are having these issues are located in North America. Chinese assembly plants are the major vehicle suppliers for Latin America, especially in Mexico, where their participation is increasing significantly. Despite the lack of semiconductors, the industry is expected to experience positive growth compared to last year. In addition, the distribution network will have inventory from all OEMs in some brands.

Q: How is the company working with distributors to provide a better after-sales service for its clients?

A: We are not only working with automakers’ dealerships; we have also created our own repair service centers network that allows the provision of maintenance for vehicles that are older than 10 years. For clients who have newer cars but have lost their original warranty, we always encourage them to return to their dealership and they can recover the bumper to bumper warranty.

Q: Consumer demand has changed in the last few years. How is GarantiPLUS adapting its service to meet these requests from customers? 

A: In Mexico we apply the big data concept; therefore, we have client information that has been collected over a period of years and we use it to cater to customers’ needs as well as to identify which makes and models are more competitive in the market. This has allowed us to establish a better pricing for our clients and a better portfolio for our Latin American market. For instance, today we have operations in Chile and Colombia. This year, we will initiate operations in Peru. Our goal is for GarantiPLUS to have a market share across all of Latin America. At GarantiPLUS, not only do we provide extended warranty services but we also offer additional insurance coverage. For instance, we have a remote appraisal company that provides these services via an app.  

Q: How does GarantiPLUS help insure car fleets in Mexico, especially when considering the poor state of roads, deficient highway infrastructure, thefts and other problems?

A: GarantiPLUS provides mechanical insurance in case the vehicle has a manufacturing defect. For fleets and rentals, we offer mechanical insurance coverage. For example, car fleets lose their insurance very rapidly due to their mileage. At GarantiPLUS, we provide them with insurance that provides coverage tailored to their specific requirements, such as extended warranties, insurance services and road-track assistance. 

Q: You became Mexico Country Manager in July of last year. What has GarantiPLUS’ growth been like in Mexico and Latin America since then?

A: We have been growing steadily. As a company, we maintain the essence of a startup but we have grown in an orderly and structured fashion. We have a very resilient team that is always one step ahead. Another element that has helped us a great deal is that we are always innovating, setting the foundation for expansion into other countries. 

Q: Electromobility is being implemented in Mexico. How is GarantiPLUS adapting to that demand? 

A: Our services guarantee the vehicle’s metallic components as well as their electric system, including batteries. The hybrid industry in Mexico has developed quite rapidly. Today, GarantiPLUS’ insurance services cover all types of vehicles, from combustion engine gasoline to diesel, hybrids, mild hybrids, electric and plug-in. We are getting ready for electric technology to be adopted in Mexico.

Q: What are GarantiPLUS’ objectives for next year? 

A: We have quite ambitious plans for next year. We would like to grow 20% in comparison to 2022. We have many opportunities coming our way in terms of numbers, infrastructure and market share in Mexico and Latin America. We expect 2023 to be a challenging year; nevertheless, we anticipate it will be a positive year for us since the industry is expected to grow between 3.5% and 3.7% in comparison to last year.