GM expected to offer 100,000 mile warranty

[kaisen]

Automotive News | 10:00 am, September 6, 2006

DETROIT -- General Motors will extend vehicle warranties across all of its brands.

The new marketing move is expected win over consumers who have migrated to brands such as Hyundai and Kia, which offer 10-year/100,000-mile powertrain warranties.

GM executives consulted with auto dealers on the issue and are expected to announce this afternoon that starting today, GM products will come with longer warranties.

Some GM products will have a 5-year/100,000-mile warranty, while others will carry as long as a 10-year/100,000-mile warranty, a GM dealer familiar with the plan said today.

GM CEO Rick Wagoner is scheduled to announce a "major customer initiative" at press conference here at 1 p.m. today.

"You'll see a base-line long-term warranty," the dealer said. "And for the wearing-out parts, a more conventional warranty."

The dealer said GM also will stick to its competitive pricing plan of lower sticker prices that are closer to the transaction price. But the dealer does not see GM cutting incentives by much.

"I don't see the warranties and incentives going hand-in-hand," the dealer said. "GM will still use incentives wherever it's strategically appropriate."

GM discussed the idea with dealers for nearly a year. GM and its dealer councils favored the change to reflect their confidence in the quality of GM's products. Because of improved quality, "it's not a big risk or as expensive as" people might perceive it to be, the dealer said.

[GDSOB]

Based on my experience with GM products, this should eliminate any possibility of running in the black.

[RANDY P]

Originally posted by GDSOB
Based on my experience with GM products, this should eliminate any possibility of running in the black.

[lendaddy]

Suddenly a vacuum forms in the GM wrench market. Crowds of mechanics can be heard cheering "Overtime! Overtime! Overtime!"

[gaijindabe]

What do "powertrain warranties" cover anyway? Not too many GM engines need a valve job or a new crankshaft or something like that at 100K. That is not where the reliability issues lie.

[RallyJon]

"And for the wearing-out parts, a more conventional warranty."

LOL! The wearing out parts. You know, like engines, transmissions, paint, spot welds, all electronics, all bushings, etc.

[Jared at Pelican Parts]

Today is a good day for GM mechanics..

[JonT]

reminds me of a "Tommy Boy" line "if you slap a warranty on a piece of shi* its still a piece of shi*" when he's doing his sales pitch for Dan Ackroyd.

[kaisen]

The announcement was 5 years / 100,000 miles on powertrain warranty with zero deductible and completely transferrable at no charge. Also includes complementary transportation and roadside assistance for the 5/100 term.

[GDSOB]

Originally posted by gaijindabe
What do "powertrain warranties" cover anyway? Not too many GM engines need a valve job or a new crankshaft or something like that at 100K. That is not where the reliability issues lie.

My 2000 Impala needed a tranny at 50K...

[lendaddy]

Originally posted by kaisen
The announcement was 5 years / 100,000 miles on powertrain warranty with zero deductible and completely transferrable at no charge. Also includes complementary transportation and roadside assistance for the 5/100 term.

It's good to see they have caught up with Kia.

[dd74]

Originally posted by SoCal911SC
The fact they felt the need to do that is an interesting statement on the buying public's view of the quality and reliability of GM products.

This is almost certainly the direct result of GM's extensive marketing research, focus groups, etc. A likely question asked: "What is stopping you from buying a GM?" Likely responses: "I've had a lot of problems with them, out of warranty."

That kind of coverage was necessary for the Korean manufacturers when they first broke into the US market. Amazing that GM would feel the need for it.

So, they feel by extending a warranty, instead of producing a better product, that it will encourage people to buy the product as is?

I don't know...seems problematic. In fact, it seems like GM is taking the buying public for granted.

Secondly, I'd like to see what exactly is and isn't covered under a 10/100,000 warranty, as well as what style of driving that warranty covers.

Will they cover Corvettes in that manner, knowing the sort of driving some Corvette owners engage in?

[kaisen]

Originally posted by SoCal911SC
The fact they felt the need to do that is an interesting statement on the buying public's view of the quality and reliability of GM products.

Undoubtedly true -- just listen to the opinions on this forum. There is NO DOUBT that there is a negative perception of GM's quality. GM believes that there is now a gap between customer perception and reality. GM's warranty claims have gone down 40% in frequency and cost over the past five years. Well, they're putting their money where there mouth is and guaranteeing it.

Originally posted by lendaddy
It's good to see they have caught up with Kia.

No, not really.

Both Kia and Hyundai have 100,000 mile powertrain warranties that apply ONLY to the original owner. They are not transferrable.

GM figures that a transferrable warranty also improves resale value, which further lowers total cost of ownership. Higher resale/residual values also mean lower lease payments.
The powertrain warranty also means lower bumper-to-bumper ('wrap')warranty prices, as the 'expensive' components are already underwritten.

[kaisen]

Originally posted by dd74
Will they cover Corvettes in that manner, knowing the sort of driving some Corvette owners engage in?

Corvettes are covered the same way. Racing will void the warranty if there is a direct causal relationship, like every other manufacturer.

[nostatic]

Good on them. I hope for the sake of the country that it helps them remain afloat. I still have yet to see a GM product that I'd pay money for. Maybe in another 10 years they'll continue to get better and the Japanese will get worse.

[Icemaster]

After 25+ years of hard fought and successful competition by Japan & co., not bloody likely. But it's good to dream.

[Rikao4]

JonT nailed it, and while even Honda / Toyota have had issues..this just another life jackett thrown at the Titanic.
Rika

[asphaltgambler]

GM techs will be crying all the way to the poorhouse. Warranty time typically pays less than 50% of COD for the same job. All they can see is nothing but warranty forever now. Good-bye COD jobs

[lendaddy]

Originally posted by kaisen
GM's warranty claims have gone down 40% in frequency and cost over the past five years.

Didn't they sell about 40% fewer cars as well?

[lendaddy]

Originally posted by asphaltgambler
GM techs will be crying all the way to the poorhouse. Warranty time typically pays less than 50% of COD for the same job. All they can see is nothing but warranty forever now. Good-bye COD jobs

"Customer pays"