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GM to announce Industry Leading Warranties.

M

MikeMike

Lifer
Source says GM to announce 'industry leading' extended warranties in an effort to stop slide in market share to import brands.

September 6 2006: 10:26 AM EDT

NEW YORK (CNNMoney.com) -- General Motors Corp., struggling to stop its continued market share losses and close the perception of worse quality with import brands, plans to announce an "industry leading" warranty offer Wednesday, according to someone familiar with company plans.

The company has announced that Chairman and CEO Rick Wagoner will announce "a major consumer initiative" at 1 p.m. ET Wednesday.

The company has suffered with customer perception of producing lesser quality cars than many import brands, particularly from Japan, even as some measures have shown that the quality gap has been closing faster than perceptions.

The latest J.D. Power Dependability study, which surveyed 48,000 owners of 2003 model-year vehicles to see how the cars fared three years after purchase put two GM brands, Buick and Cadillac, No. 3 and 4, respectively, in quality, ahead of brands such as Toyota, Honda and BMW. Lexus, the luxury brand of Toyota Motor, finished No. 1.

The lower perceived quality has caused GM to offer larger cash-back offers or other costly incentives to hang onto declining market share. But offering a longer warranty will also cost the company money as it struggles to trim losses from its core North American auto operations.

GM currently offers a 36-month, 36,000 mile warranty on most of its vehicles. Some Korean automakers such as Hyundai, which has also faced consumer perception problems, offers a 5-year, 60,000 warranty on just about all parts of its vehicles, along with a 10-year, 100,000 mile warranty on its powertrain.
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Originally posted by: MIKEMIKE
Source says GM to announce 'industry leading' extended warranties.
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So, does this mean their normal warranty is not affected, and that you can have industry leading extentions if you pay through the nose for it?
 
Originally posted by: dullard
Originally posted by: MIKEMIKE
Source says GM to announce 'industry leading' extended warranties.
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So, does this mean their normal warranty is not affected, and that you can have industry leading extentions if you pay through the nose for it?
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thats just how they worded it.

this is from another source...

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.
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Originally posted by: MIKEMIKE
thats just how they worded it.

this is from another source...

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.
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Ok, that second source sounds much better. I was confused by the text in the first one.

 
Originally posted by: dullard
Originally posted by: MIKEMIKE
thats just how they worded it.

this is from another source...

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.
Click to expand...
Click to expand...
Ok, that second source sounds much better. I was confused by the text in the first one.
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ones CNN and the other is automotive news, which do you think will word it better?
 
It seemed to have helped Hyundai and Kia a great deal.
Now the buyers who didn't buy a GM because they were affraid of reliability, will get some piece of mind.
 
Originally posted by: MIKEMIKE
Originally posted by: dullard
Originally posted by: MIKEMIKE
Source says GM to announce 'industry leading' extended warranties.
Click to expand...
So, does this mean their normal warranty is not affected, and that you can have industry leading extentions if you pay through the nose for it?
Click to expand...

thats just how they worded it.

this is from another source...

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.
Click to expand...
Click to expand...

That would have gotten me on the GM lots last month when I bought my hyundai. Not if they charged extra for it though. GM will still have to fight the perception that they're going to go bankrupt and disappear though (I don't believe that, but a lot of people seem too) because people aren't going to see much value in a warranty if they think the company is about to fold.
 
My Dad will be happy 🙂

He bought a Silverado two years ago and it has been nothing but trouble for him. He's rapidly approaching the end of the orginal B2B warranty is is scared to know what will continue to break on him.

He's been writing letters to GM on almost a monthly basis saying they need to increase their warranties from 3/36 up to 5/60. If they do that, he'll feel like he won a small battle 🙂

Ford recently bumped up their powertrain, and Dodge did the same years ago(but with a deductable). So it was only time before GM responded.
 
Originally posted by: senseamp
It seemed to have helped Hyundai and Kia a great deal.
Now the buyers who didn't buy a GM because they were affraid of reliability, will get some piece of mind.
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Yeah, it sure would be nice if GM did something similar to Kia. GM actually rates very highly on reliability, with a few exceptions (Saturn and Saab tend to do poorly).
 
It's a typical response to a typical American Motor Car Dilemma. They produce sub-par vehicles, wonder why their share is sliding, and slap a band-aid on it (i.e. warranty, discounts). It's treating the symptom, not the problem. The warranty would be nice, but it doesn't change the fact that most (not all, though) of their cars are horribly built.

Real Solution? Build a more reliable car (and it helps if it doesn't look like a gimp monkey designed the body).

I swear, you'd think they would have clued in by now to the demands of the public...Why are the foreigns so successful? They took que...hell, even Hyundai's quality is improving each year.
 
i was able to swing a 7/70 bumper to bumper on my dodge 😀 powertrain has a 10/100
of course they stopped offering this on the 2006 models but yay me for getting in early
 
Originally posted by: senseamp
Now the buyers who didn't buy a GM because they were affraid of reliability, will get some piece of mind.
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Initially the effect will be small. I still wouldn't buy an unreliable vehicle even if it had a 100 year, 10 million mile warranty without costing any more for the warranty. Why? Because, I can't stand to have my vehicle constantly in the shop. It is a pain to get it there, you may be stranded when it breaks down, and you have to suffer without a vehicle for quite some time. Also, as PingSpike said, if you are worried about the company's financial situation, you might not trust the warranty. Thus, initially the effect will be small.

However, in the long term, this will change. GM should get on sound financial ground. Also, the longer warranties will give GM a real financial incentive to make designs that are less prone to failure and to use parts that are less prone to failure. So long term, this can be a big boost to GM's sales. That is, if GM doesn't raise the price to compensate.
 
Will this extended warranty be implied on existing vehicles? My current 04' Grand Prix just topped 36k miles last month. Sure would be great to not have to worry for another year or two.
 
Originally posted by: blurredvision
Will this extended warranty be implied on existing vehicles? My current 04' Grand Prix just topped 36k miles last month. Sure would be great to not have to worry for another year or two.
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i hope 😀

 
Originally posted by: JS80
i'm still gonna buy a lexus...
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I bought one recently. You won't regret it. Lexus has the best customer satisfaction and awesome service. 5/50k bumper to bumper and 7/70k powertrain warranty standard.
 
Originally posted by: JulesMaximus
Originally posted by: JS80
i'm still gonna buy a lexus...
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I bought one recently. You won't regret it. Lexus has the best customer satisfaction and awesome service. 5/50k bumper to bumper and 7/70k powertrain warranty standard.
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predictable
 
Originally posted by: dullard
Originally posted by: senseamp
Now the buyers who didn't buy a GM because they were affraid of reliability, will get some piece of mind.
Click to expand...
Initially the effect will be small. I still wouldn't buy an unreliable vehicle even if it had a 100 year, 10 million mile warranty without costing any more for the warranty. Why? Because, I can't stand to have my vehicle constantly in the shop. It is a pain to get it there, you may be stranded when it breaks down, and you have to suffer without a vehicle for quite some time. Also, as PingSpike said, if you are worried about the company's financial situation, you might not trust the warranty. Thus, initially the effect will be small.

However, in the long term, this will change. GM should get on sound financial ground. Also, the longer warranties will give GM a real financial incentive to make designs that are less prone to failure and to use parts that are less prone to failure. So long term, this can be a big boost to GM's sales. That is, if GM doesn't raise the price to compensate.
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Technically speaking, GM profited last quarter. While they did post a loss, it was entirely because of payouts. While GM still has a lot to fix to become a healthy company, it has done a lot to improve its situation.
 
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