GM Will Lengthen Warranties, Reduce Cash Incentive

[hyperv6]

Per Bloomberg.com.

GM General Motors Corp., the world's largest automaker, will offer longer warranties on its vehicles in a bid to boost confidence in GM products, two people familiar with the plan said.

The extended warranties mark the next phase of an eight- month-old initiative to rely less on cash incentives to generate sales, said the people, who asked not to be named because details won't be announced until later today. GM spokeswoman Mary Henige had no comment.

If true I think this will work as if you want to make people feel you really have quality prove it by backing it up.

It worked for Hyundai when they offered a 10 year 100,000 mile warranty after there first cars crumbled in the hands of the owners.

Good pricing and great warranties can sell a lot of cars as many buy with ther wallet and no their heart. I work with many that do this and they are driving Hyundia's just for those reasons.

By the way after Hyundia added the better warranty sales increase from 1999-2005 82%.

[Matt276]

A 5 years/60K bumper to bumper warranty would be great.

[ichbinjohnk]

I want to know why it has taken them so long to wake up to this idea...

[Drew Dowdell]

I want to know why it has taken them so long to wake up to this idea...

190011[/snapback]

It didn't. They tried it with Oldsmobile and look where it got them.

[Robert Hall]

I want to know why it has taken them so long to wake up to this idea...

190011[/snapback]

Exactly..a 3 yr/36k warranty is pretty skimpy...

[CARBIZ]

Now hold on, Buick has a 4/80 already, as does Cadillac. Chevy runs with a 3/60 on all their vehicles, but a 5/100 on the powertrain for the Cobalt/Pursuit and the Uplander atrocities. Oops, the above numbers are in km, not miles.

Truthfully, it would be relatively cheap to upgrade the standard warranty to a 4/80. I suspect the resistance has come at the dealer level. Don't forget that many dealers are making damned little on the sale of the actual vehicle, so they are making the money in the business office. One of the reasons GM has enjoyed the best working relationship with the dealers, as opposed to Ford and Chrysler, is that they have allowed for these alternate profit centers.

I do find it interesting that consumers are demanding more for less. I've been shopping for plasma TVs and you are lucky to get a 1 year warranty on those. I am concerned about spending $3,000 on something that will be worthless if a few of the "bulbs" start burning out and they only back them for a year! Yet, consumer pressure is demanding 4 and 5 year coverages on a machine with thousands of moving parts that are prone to abuse.

You realize that those in the south and southwest are going to be subsidizing those who live in the north and northeast where more severe duty is experienced. For those of you who hate socialism, that is a reality of extending the coverage of warranties. They aren't free and the cost will be passed along.

[Derek77]

Media Advisory: GM's Wagoner to Announce Major Consumer Initiative

DETROIT - General Motors Chairman and CEO Rick Wagoner will announce a major consumer initiative at a news conference on Wednesday, Sept. 6, at 1 p.m. EDT at the GM Renaissance Center. A news release will be issued at 12:50 p.m. EDT, and will be available on GM Media Online (media.gm.com). Th e release and additional media materials also will be distributed at the news conference.

[Robert Hall]

  I do find it interesting that consumers are demanding more for less.  I've been shopping for plasma TVs and you are lucky to get a 1 year warranty on those.  I am concerned about spending $3,000 on something that will be worthless if a few of the "bulbs" start burning out and they only back them for a year! 

190019[/snapback]

There's a big difference between buying a $3k TV and $30k car... I would expect a much longer warranty on the car, as it is more complex and has a lot more components.

Edited September 6, 2006 by moltar

[SouthHavenSal]

GM Announces Best Warranty

Validates Quality/Dependability

GM to Provide 100,000-mile/5-year Powertrain Warranty, Roadside Assistance and Courtesy Transportation on all 2007 US and Canada Cars and Trucks.

[Newbiewar]

wow... good news... ive been complaining about this for a while now...

[Newbiewar]

General Motors Corp. (GM : General Motors Corporation was right behind it [Proctor and Gamble] at $1.29 billion, although advertising spending was down 17.4%

GM expected to announce longer warranties

By Shawn Langlois, MarketWatch

Last Update: 11:15 AM ET Sep 6, 2006

SAN FRANCISCO (MarketWatch) -- General Motors on Wednesday is expected to take a cue from Hyundai's groundbreaking 100,000 mile warranty plan and expand its current program, which mostly mirrors the industry standard of 36,000 miles.

GM's (GM : General Motors Corporation GM 31.01, +0.57, +1.9%) stock bucked early market weakness to trade up 1.8% at $31.

The automaker said it will announce a "major consumer initiative" at 1 p.m. Eastern, but spokeswoman Janine Fruehan declined to comment on specifics.

GM has made strides in improving the quality of its products in recent years, but it still trails in the perception game to Toyota. (TM : toyota motor corp TM 107.67, -1.47, -1.3%) .

Media reports early Wednesday said GM is likely to announce a five-year, 100,000 mile powertrain limited warranty with no deductible. Such a move would be aimed at igniting sales as it did for the resurgent Hyundai brand in 1999.

An extended warranty approach, which could prove costly if quality slips, will ideally help GM forge ahead with its strategy of relying less on cash incentives to battle its rivals for share in the key U.S. market.

Edited September 6, 2006 by Newbiewar

[Northstar]

That's kind of a weird warranty. I don't know many people who drive 100k miles in 5 years, so to me it's really just a 5-year warranty.

I wonder how dealers will react? They might sell more cars, but in the future, they'll be doing more warranty work, and unless I'm mistaken they make less off of that than non-warranty work.

[Newbiewar]

That's kind of a weird warranty. I don't know many people who drive 100k miles in 5 years, so to me it's really just a 5-year warranty.

I wonder how dealers will react? They might sell more cars, but in the future, they'll be doing more warranty work, and unless I'm mistaken they make less off of that than non-warranty work.

190040[/snapback]

honnestly this wont really cost gm much in my opinion... almost every powertrain they make is good for 100k easy...

but a lot of people do drive that many miles...

and you are going to attract high mileage customers... customers that a lot of people look to for car "word of mouth" because they drive 100k miles in a few years...

I know a few guys with 200k miles on 2001's and what not... or a guy had 360k miles on a 2003 silverado...

a lot of people at least here in cali, have 50 mile comutes one way... so working 5 days a week... 100x5x52 = over 25k miles a year... x 5 years... 130k miles...

[caddycruiser]

A 5/100k powertrain warranty is good, as that's one area where--if there are problems--they're usually the most expensive repairs. Still not as good as a 5/60 bumper to bumper and 10/100 powertrain, but an improvement.

It shouldn't cost much more or require more dealer labor time either, as long as GM doesn't have anymore powertrain snafus from here on out (i.e., no more bad 3.8L intakes, shot 3.1/3.4L head gaskets, etc.). They generally go 100k+ easily without any repairs, anyway.

Doesn't help with all the trim and body accessory issues, which has put our Suburban's bumper to bumper coverage in use a few times, but that's usually just minor stuff anyway, that gets sorted out early on.

Still GREAT news for my mother, who's out of warranty on everything usually after 2 years, and should help keep her in the company.

Edited September 6, 2006 by caddycruiser

[CSpec]

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http://www.cheersandgears.com/forums/index...showtopic=11673