In 2012 Automóvil Club de Chile abandoned a line of business that had historically been part of its operations: the provision of assistance services, mainly en route through tow trucks. Before the pandemic, the firm had decided to resume it, but it was suspended due to the magnitude of that emergency.
Now the company is betting on this item again with a strategy that goes beyond the automotive world, as it seeks to partner with banks, compensation funds and insurers to provide a range of service options such as legal, veterinary, health, travel, etc.
The general manager of Automóvil Club de Chile, Alfredo Lavanchy, explained that “we made this strategic decision because we are very familiar with this line of business and we have the support of the entire network in the world.” This will allow the company to provide, for example, travel insurance coverage for clients through banks abroad.
The expansion plan
In the last three years, the company has experienced a sustained increase in its billing, from $7.3 billion in 2018 to sales of $16 billion at the end of this year, Lavanchy estimates. The reason is the opening of several lines of business, among them the automotive service at home, the insurance brokerage and the provision of a driving school for mining.
Now Automóvil Club de Chile is thinking about its next line of development associated with providing assistance to companies that seek to expand their reach through its network. Thus, for the first year of operation of this segment, the firm expects to increase its global revenues by 25% to reach around $20,000 million, the executive indicated. And by 2027, the company estimates that the assistance segment will represent half of its sales.
Although there are currently several companies that offer similar services, Lavanchy believes that there is an important opportunity in the car category, since the current attention is not efficient enough.
The Automóvil Club de Chile proposal considers a network of providers -such as clinics, tow trucks, legal services, etc.- that will be connected to a call center that will operate 24 hours a day. every day of the week, for which it will make its platform available to facilitate the connection of customers with each service provider.
The first phase, already underway, has 400 suppliers, which in 2023 will increase to a thousand associates, the strongest being the automotive road assistance business. In the future, growth will be based on the development of the rest of its network, such as the area of home services, such as plumbing or electricity repairs.
Asked about the difficulty of building such a diverse provider network, Lavanchy explains that “the processes to serve customers are all similar; regardless of whether it is the car, the house or health, the network of providers is built with the same protocols and standards, the difference is the payment of each one. The needs of my partners are multi-product, and if I stick to just one, the niche will not be attacked well”.