Opportunities for a Consolidated Extended Warranty MarketBy Alejandro Enríquez | Thu, 09/02/2021 - 06:00
Q: How is GarantiPLUS taking advantage of the industry’s slow but steady sales recovery?
A: Semiconductor shortages continue to have a negative influence on the sector, while the high availability of different models has created some challenges for dealerships. GarantiPLUS has introduced attractive products that can help dealerships increase their profit margins. Some dealerships have numerous pre-owned or used vehicles in their inventory and we help them to sell these vehicles through different strategies or benefits for the customer. For example, dealerships can offer “small warranties” and other warranty upgrades to increase customer fidelity and boost their margins.
Q: Recently you announced a partnership with Mercado Libre. What is the nature of the partnership? What other partners are key to GarantiPLUS?
A: We have several partnerships with different groups and stakeholders. With Mercado Libre, we created a customized product on the platform that provides warranties for the seller of the vehicle. The next step will be to create warranties for buyers. We are also working with OLX Autos in Mexico, with plans to expand with that company throughout Latin America. GarantiPLUS is also talking with several players in the heavy-vehicle and insurance segments and with different automotive groups.
Q: How has GarantiPLUS increased its presence in Latin America?
A: GarantiPLUS Chile is already operating and disrupting the market hand-in-hand with some of our partner brands in Mexico. In addition, we will soon open GarantiPLUS Colombia and we are looking forward to entering other markets in the region.
Q: How is GarantiPLUS advancing in the heavy-vehicle market?
A: Our warranties cover a variety of uses, from fleets to individual owners. We are advancing steadily in the heavy-vehicle segment as dealerships want to provide their customers with greater value. That is where we come in. Some of our clients in the heavy sector are trying new models to support their customers. We continue to test new solutions, such as warranties for Chinese-made trucks, and we continue to earn the trust of new segments.
Q: What are the opportunities electric and hybrid vehicles represent for extended warranties?
A: Trends in the automotive industry suggest that customers will eventually shift toward hybrid and electric vehicles but a major challenge is the high price and unattractive financing schemes for these vehicles. Hybrid and electric vehicles have certain components that can be really expensive to replace or repair. Those elements should be considered under tailor-made warranties. GarantiPLUS México can tap the e expertise of our Spanish counterpart and we currently offer warranties for electric and hybrid vehicles. We provide warranties for Hyundai or Toyota’s hybrid models in Mexico. This is a natural process considering that we will see greater demand for these products.
We are among the few companies that provides warranties for vehicles powered by natural gas and in some cases, we even insure the conversion process to natural gas. This is key because any modification to the vehicle causes it to lose its original warranty.
Q: How does GarantiPLUS take advantage of the greater connectivity of vehicles?
A: GarantiPLUS is developing a platform that will allow the customer to use most of our services, get invoices and make claims through our app. We expect this project to be finished by the end of the year.
The first step toward taking greater advantage of a more connected vehicle is to track driver behavior and vehicle performance. Our solutions in Spain integrate vehicle data into our systems through cloud-base data infrastructure, which allows us to offer preventive maintenance.
Q: The company is celebrating five years in Mexico. What are your goals for the future?
A: GarantiPLUS’ midterm goal is to help companies and small businesses to acquire their own warranty systems. We have all the necessary legal, management and training expertise to provide support and allow companies to access warranty markets more easily. At the international level, our goal is to enter more countries in Latin America and to explore opportunities in the US market.
GarantiPlus specializes in the development and management of extended warranty services. The company has more than 15 years of experience in the automotive sector and more than 400 points of sale in Mexico.