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General Motors to Boost Warranties to Entice Consumers

Wednesday, September 06, 2006 (Fox News)

DETROIT — General Motors Corp. (GM) has increased the powertrain warranty on all of its 2007 passenger vehicles to five years and 100,000 miles, in a move that the automaker hopes will boost its reputation for quality versus its main Japanese rivals.

The increase, from the previous warranty of three years and 36,000 miles, is effective Wednesday and covers 900 engine, transmission and driveline components, said Mark LaNeve, GM's North America group vice president.

The warranty is part of the company's overall strategy to sell the value of its products as opposed to a deal laden with cash incentives, LaNeve said.

LaNeve said also that by both internal and external measures, such as studies by J.D. Power & Associates, the company has closed the quality gap with its Asian competitors.

"Because of deficits 20 years ago, we're living with a perceptual gap. Perception hasn't caught up to reality," LaNeve said.

The warranties have deductibles and are transferrable, the company said. They also are accompanied by GM's roadside assistance and courtesy car programs.

GM said the powertrain warranties are better than any "full-line manufacturer" in the industry, and will be in addition to the current three-year, 36,000 mile bumper-to-bumper guarantees. Buicks, Cadillacs, Hummers and Saabs currently have four-year, 50,000 mile bumper-to-bumper coverage.

Korean automaker Hyundai offers 10-year, 100,000 mile powertrain guarantees.

In July, Ford Motor Co. (F) extended its powertrain warranties by up to two years on its 2007 Ford, Lincoln and Mercury models.

On Ford and Mercury vehicles, the powertrain warranty was raised to five years or 60,000 miles, whichever comes first, up from the current three-year, 36,000-mile bumper-to-bumper warranty.

Lincoln powertrain warranties were extended to six years or 70,000 miles, up from the previous four-year, 50,000-mile bumper-to-bumper guarantee.

The warranties cover the engines and transmissions and are retroactive to any 2007 models that already have been purchased, Ford said. The automaker also offers similar guarantees on 2006 models still on the lots.

LaNeve said GM picked five years and 50,000 miles because that's the normal time that owners keep cars and trucks.

He would not disclose the cost of the warranties, but said that GM's quality has improved incrementally over the last five or 10 years to the point where it's cost-effective to offer such guarantees.

http://www.foxnews.com/story/0,2933,212510,00.html

RLSH700

I not sure what to think about this. It might bring some new people in, but this means their warrantee costs are going to go up; however, this could encourage them to improve their quality more so then they won't have to do as much warrantee work.