The Automobile Association (AA) has revealed a rise in its membership for the first time in a number of years following a change in focus and investment in its website and advertising.
Martin Clarke, the Association's finance director, said: “After many years of decline we’ve started to turn the corner." The AA is in its second year of a plan to turnaround its fortunes and has seen its membership numbers increase since May – with the total now standing at 3.3 million.
The AA offers breakdown services to members for the price of a yearly subscription. The fact that membership levels are rising could be welcomed by independent garage owners as a sign that car owners are becoming more willing to spend cash on car maintenance and repairs. Garage owners need to ensure they take out comprehensive road risks insurance to cover them for any damage done to customers' car while they are being repaired or driven by mechanics.
As part of its drive to increase profits, AA has stopped offering free membership to its insurance customers. This was one of the changes imposed when the AA was taken over by new owners in 2014, from its previous private equity owners. Under the previous owners, no money was being spent on advertising and membership numbers had been on the slide for years as a result.
As well as upgrading its website, the AA is investing some £128 million on a better IT system and has stumped up some £10 million on an outdoor advertising campaign. As a result, pre-tax profits increased to £48 million in the six months for July 2016, up from a loss of £69 million during the same period a year ago.