Outlook: The AA does a quick U-turn

AS CHANGES in direction go, the handbrake turn executed yesterday by the Automobile Association is as abrupt as they come. At first, the strategy was to leverage more profit out of its membership base by selling its 9.5 million breakdown members everything from insurance and route maps to tyre levers.

That plan was comprehensively junked yesterday in favour of concentrating on the core breakdown business.

Perhaps the only surprise about the AA's decision to withdraw from the high street is that it has not done so before. As tragic as the move is for the 850 employees involved, the writing has been on the wall ever since Direct Line showed several years ago that drivers were more than happy to buy their car insurance over the phone.

The AA followed suit and the result is that just one in five of its insurance policies are now bought over the counter of one of its shops.

A couple of years ago the AA would have shrugged and tried to use its trustworthy image to sell some other unrelated service. The result, however, was that the AA took its eye off the emergency services from which it derives its good name. It may still call itself the Fourth Emergency Service but a load of drivers decided to try their luck elsewhere.

With the RAC and Green Flag about to be merged - regulators permitting - and Direct Line picking up thousands of new customers a month with its new breakdown service, competition is only going to get more intense.

John Maxwell, the AA's director general, recognises this and has put the entire business under review. He is closing shops and selling Home Assistance - a failed concept which was supposed to be an AA recovery service for the home.

These are the easy bits. He now has to decide whether the AA should be in things like maps, insurance and driving lessons.

Underlying all this is an overriding question: whether the AA should remain as a mutual organisation. With any windfall likely to be divided between all 9.4m members the financial incentives for potential carpetbaggers are slim.

But the AA has not shown itself to be the most nimble of organisations in the past. With car travel increasingly on the wane, the AA may well end up wondering what it is for in a few years' time.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Client Services Assistant

£18000 - £20000 per annum: Recruitment Genius: A Client Services Assistant is ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Ashdown Group: Training Coordinator - Financial Services

£32000 - £38000 per annum + benefits: Ashdown Group: A highly successful, inte...

Recruitment Genius: Business Development Executive - Affiliates & Partnerships

£20000 - £35000 per annum: Recruitment Genius: This multi-award winning foreig...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor