USATODAY.com – GM lengthens warranties to five years or 100,000 miles
For all of their whining about how the biased media unfairly portrays GM's quality, they are finally putting their warranty money where their mouth is. They claim quality has improved, now they are lengthening warranties to show they believe it. This hits home to me today because my Chevy Trailblazer is currently at the dealer, being worked on (just a few months under the 3 year warranty deadline).
From a customer standpoint, this lengthened warranty should improve the value of GM vehicles, which should help close the price gap between GM and Toyota. Whether the perception is fair or not, the market values Toyota vehicles more (at a higher price) than comparible GM models (e.g., Toyota Matrix vs. Pontiac Vibe, basically the same car).
Remember, in the lean mindset, the price for which you sell your products is determined by the market. If GM's quality improves to the point of Toyota's, the market (the customers' collective voice) will confirm that by accepting a higher price.
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Improving? That’s not how I read it. Making a longer warranty means they’ve given up trying to do it right the first time and they’ve resigned themselves to just fix it later. A Kia dealership employee once told me “Do you know why they have a 10 year warranty? Because they have to.”
I wouldn’t buy a GM over something else because of the warranty. The Camry I owned for six years wasn’t in the shop once. Toyota could have had a 1 day warranty on that car.
If GM said there warranty was 30 days, then I’d be impressed.
Thanks for reading and for your comment, Dick. To some extent, you’re right Kia DOES have to offer a 10-year warranty in order to stand out and to get you to trust their quality. Granted, if you have to get the Kia in for a free repair 20 times over 10 years, that wasn’t “free” to you in terms of time and frustration. If Kia doesn’t deliver, it will cost them in the short-term (a cost of entering the market maybe), but it will cost them especially in the long-term (lack of repeat customers).
For GM though, they say their warranty costs are going down. That must mean they are building it right the first time (or designing it right) more often. It’s a cost-driven approach, but GM figures it can “afford” to provide a longer warranty. Given GM’s cheapness, I’d assume they would only extend the warranty if it wouldn’t cost them (in the short-term). So that short-term thinking might be an indicator that quality is better, even if the thinking behind it isn’t totally lean.
You’re right — the ultimate goal is zero repairs, not free repairs.
I have to agree with Dick, this is GM’s response to poor quality and loss of market share. If customers trusted GM quality, the warranty would be irrelevent. The fact that GM is now offering 100k warranties confirms that they understand their potential customer’s reluctance to buy based on perceived poor quality.