GM to cut powertrain warranty to 60,000 miles
http://finance.yahoo.com/news/gm-cut-chevy-gmc-powertrain-warranty-60-000-143947688--finance.html DETROIT (Reuters) - General Motors Co said on Thursday it plans to cut its powertrain warranty on...
Forum Discussion
Warranty and prepaid service are sales tools, they carry a cost, that cost makes it into the vehicle price.
Reduce the warranty cost, lower the price. Lower price is another sales tool.
This is all pretty much a marketing decision. Chrysler, before even the first bailout in the 1970s, introduced longer warranty periods to help overcome a market perception (based on 1950s - 1960s buyer experience) that Chrysler Corp cars weren't lasting as long as those from GM or Ford. May not have been real, but it was a perception that marketing had to deal with.
Hyundai was the first import to use the warranty tool for the same purpose, trying to overcome the perception that Korean cars could not be as good as Japanese cars. It helped them gain market share, even before the actual cars started catching up in features, styling, finish and performance. More market share helped them recruit more dealers as well.
We've been in a warranty numbers race. 50,000 vs 75,000 vs 100,000 miles hardly means anything to the original buyers, and I think the manufacturers are starting to figure that out. 50,000 from Chrysler when everybody else was still at one year/12,000 or less, that was enough to help pull them out of a hole.
Reduce the warranty cost, lower the price. Lower price is another sales tool.
This is all pretty much a marketing decision. Chrysler, before even the first bailout in the 1970s, introduced longer warranty periods to help overcome a market perception (based on 1950s - 1960s buyer experience) that Chrysler Corp cars weren't lasting as long as those from GM or Ford. May not have been real, but it was a perception that marketing had to deal with.
Hyundai was the first import to use the warranty tool for the same purpose, trying to overcome the perception that Korean cars could not be as good as Japanese cars. It helped them gain market share, even before the actual cars started catching up in features, styling, finish and performance. More market share helped them recruit more dealers as well.
We've been in a warranty numbers race. 50,000 vs 75,000 vs 100,000 miles hardly means anything to the original buyers, and I think the manufacturers are starting to figure that out. 50,000 from Chrysler when everybody else was still at one year/12,000 or less, that was enough to help pull them out of a hole.
