Today may be seen as a watershed moment in carmaking -- at least in the last decade and for the largest full-line automaker (Hyundai and Kia already have this). General Motors - currently the world's largest automaker, has announced a standard 100,000-mile, five-year powertrain warranty with no deductible on all new vehicles and light-duty trucks for the 2007 model year. The rumor on this from a few hours ago over at 24/7 Wall St. has now been confirmed by Autoblog here.Will this rather radical departure for GM spell certain victory for the embattled automaker as it tries to seal off its debt sinking ship and regain lost sales to the resilient and powerful Toyota Motor Corp.? The proof will be in the customer pudding -- will new car shoppers consider GM vehicles again with such a powerful warranty available on its vehicles? Is GM supremely confident on the reliability of its vehicles that this new change of pace won't become a huge cost center rather than a huge incentive to new car buyers?
What happens if perceived reliability leader Toyota decides to follow suit and also offer 100,000-mile, five-year no-deductible powertrain warranty? How about Ford or Daimler Chrysler? Although, I agree with John at Autoblog -- this move was probably years in the making. Although Ford already has a five-year warranty on newer vehicles (but not 100,000-mile coverage), and Korean brands Hyundai and Kia offer a 10-year, 100,000-mile powertrain warranty, GM's new five-year, 100,000-mile powertrain warranty is different -- because it is fully transferable. Hmm -- does GM expect its cars to be sold within five years or 100,000 miles? This sets off a weird vibe in my book, kind of like a funky engine shake before a gasket blows.
If a competitor does somehow manage to respond, talk about stealing GM's thunder big time. Don't put this past Toyota as it tries to capture the #1 automaker crown from GM later this year and into 2007. Bob Lutz, GM Vice Chairman, puts out a rather audacious blog headline talking about GM's bold new move -- he says "Because We Can". Shrewd, Bob. Very shrewd.
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Reader Comments (Page 1 of 1)
9-06-2006 @ 7:08PM
Rich said...
Constantly slashing prices ultimately only devalues a product in the public’s perception. Increasing a warranty demonstrates a manufacturer’s confidence in the product, which can only burnish the product’s image to the public. All GM has to do now is demonstrate that their products are constructed with such quality that most people won’t even need to use the new warranty.
9-07-2006 @ 5:28PM
Robert Nelson said...
Toyota has great quality and GM has had trouble catching up. In my mind they have caught up and now have terrific products. My last GM cars have been trouble free with all systems working great. Auto writers have been slow in giving praise to USA based companies in what they have accomplished.