Israel Escutia
CEO
GarantiPLUS México
/
View from the Top

A Changing Market Needs Adaptive Protection and a Strong Team

By Sofía Garduño | Fri, 06/10/2022 - 08:14

Q: What factors are contributing to the growth of the extended warranty market?

A: During the past few years, the warranty market has grown significantly, boosted by the COVID-19 pandemic, and the shortage of chips and new-car inventory. Customer perception of this market is also changing, which is generating great opportunities for many companies.

As the used car market grows, our product becomes more relevant. Consumers are becoming increasingly conscious of the importance of warranties in protecting their vehicles. Besides, when buying a new vehicle, customers are skipping official maintenance services because of their high costs, forcing warranty companies to look for new business models with new products and new coverages

Q: How has demand for your services evolved as a result of the rising popularity of used vehicles?

A: We are noticing that clients in this market segment are becoming more demanding; they are looking for an extended warranty backed by more added-value products. Clients worry that if they buy a used vehicle, it will soon stop working and they might not have the resources to fix it. For that reason, more people are acquiring extended warranties to face those unexpected situations. On the other hand, our automotive Dealers need more products that are profitable and that help their customers, for this reason we are making guarantee programs to all the automotive groups in the country.

Q: How does the Mexican market differ from others?

A: The Mexican market’s size makes it a demanding one, so GarantiPLUS Mexico is creating products that can satisfy its needs. Six years ago, before we started to operate in Mexico, the country lacked a product without a kilometer limit in the market. We started offering this service to meet the needs of users of vehicles for delivery, utility, fleet and public transport. We have been so successful in offering new products that even our competitors have copied it and new warranty companies have emerged that base their products and services on what we are doing.

Q: Most consumers of extended vehicle warranties are young people, who are also attracted to the car-as-a-service model. How has this shift impacted your business?

A: This shift in preferences limited our reach in the B2C market, so we are focusing on B2B. We offer lessors products with added value that can make their business models profitable and do not impact their clients’ finances. This allows young people to rent a vehicle or use mobility platforms at a low cost. 

We recently allied with ClikAuto and its 3 divisions, both in its marketplace for used vehicles, as well as ClikAuto Finance that offers digital credit and finally in its  mobility model in which users pay per day, hour, week or year. We are creating the warranty programs for used-vehicle platform OLX Autos. Last year, we allied with Mercado Libre so that it could provide a free warranty for used vehicles. In all these examples our products are in accordance with business needs and invite youth to obtain a used car or rent a mobility model

Q: As vehicle technology evolves with the adoption of EVs and autonomous technologies, how will warranties change?

A: We have products for both electric and hybrid vehicles. We are enthusiastic about this business because the Mexican market is assimilating electromobility and investing in its infrastructure. We can develop products to protect both vehicles and electric chargers. While electric failures are more expensive than mechanical failures, the data we have collected throughout the years allows us to offer competitive prices to our commercial partners and benefits to end customers. We are prepared for the upcoming electromobility boom in Latin America and Mexico.

Q: In early 2022, GarantiPLUS reportedly sold most of its policies in the Bajio region. What made your service popular in this location?

A: This was achieved thanks to our sales team. Across the country, we have a mature team with specialized knowledge of our product. We are always training our teams and our collaborators  so they can be happy with their work, which translates to our commercial partners. Our salesforce is continuously growing and we are recruiting talent to satisfy the needs of the Mexican market.

Q: How has GarantiPLUS maintained its position in the Mexican market?

A: Our team is our main strength. We are a transversal company; we listen to the market and to our collaborators because they are our eyes and ears. This has allowed us to develop products that have become disruptive during the last year.

In late 2020, we incorporated life insurance into our warranty offer, which had a great reception in the market. We are also expanding our offering with products related to vehicle aesthetics, the loss of keys and auto parts theft, among others.

Q: What makes GarantiPLUS an attractive company for employees?

A: We have developed our leadership within the company. We want our associates to be happy and satisfied with their jobs. Everyone is now working from home and we recruited talent for their training to help them to develop valuable soft skills for their roles. We have maintained our commission scheme and, whenever we have the opportunity, we launch programs to motivate the team to deliver better results and increase their earnings.

Q: What goals does GarantiPLUS expect to achieve by the end of 2022?

A: We are operating in Spain, Mexico, Chile and Colombia and will soon expand to Ecuador and two other countries. We want to consolidate our operations in each country and help our Dealers to be more profitable. We aim to recruit more talent to meet the expectations of the local and international markets. We expect to have a solid team,  protected clients and satisfied stakeholders

GarantiPLUS specializes in the development and management of extended warranty services. It has over 15 years of experience in the automotive sector and more than 400 points of sale in Mexico.

 

Photo by:   MBN
Sofía Garduño Sofía Garduño Journalist & Industry Analyst