news

Mitsubishi considering seven-year warranty across the range

Mitsubishi could become the second car brand inside the Top 10 to offer a seven-year warranty across the range.


This comes as part of sweeping changes that may also extend the capped price servicing program beyond the current limit of three years.

Mitsubishi introduced a seven-year warranty on the new Triton ute in December 2018, but is yet to extend it to include other models in the range which have five-year coverage.

Mitsubishi was the second brand to offer a five-year warranty in Australia – in 2004 – after South Korean carmaker Hyundai pioneered the concept in 1999 as a means of establishing its credentials.

However, now that every brand in the Top 10 offers five years warranty coverage or more, Mitsubishi is considering extending its after-sales customer support.

“We are actually looking at a few initiatives that looks at warranty,” said John Signoriello, president and CEO of Mitsubishi Australia, during a recent media briefing with the chief operating officer of Mitsubishi globally, Ashwani Gupta.

“Let’s just say that we are working on a few things at the moment. It’s (down to) business case. If we can make it stack up we will come out with something that’s quite competitive.”

At the moment, Mitsubishi Japan covers the warranty cost for the first five years and Mitsubishi Australia covers the cost of the additional two years warranty for the Triton to bring total coverage to seven years.

Contrary to perception, warranties aren’t free. Car companies hold back a portion of the profit from each vehicle to cover future warranty claims. The longer the warranty, the more money needs to be set aside for each vehicle sold.

At the moment, Mitsubishi Australia is covering the warranty cost from five to seven years in the same way Kia Australia finances its warranty coverage from five years to seven.

The other element of the owning experience in urgent need of review is Mitsubishi’s comparatively short capped price servicing period, which runs out after just three years. 

Most car companies offer price certainty for routine maintenance for the at least the length of the warranty; some brands offer a capped pricing well beyond the warranty period.

At the moment, Mitsubishi only guarantees the maximum price paid for routine servicing every 15,000km or 12 months (whichever comes first) for the first three years.

“We’re going to group (capped price servicing costs) in our review,” said Mr Signoriello. “There’s an opportunity there to do something a little bit better and a lot of different to what’s out there at the moment (to) try to create a bit of a point of difference.”

When asked if there may be a push to try to merge some of Mitsubishi’s 190 dealers nationally with the existing network of Nissan dealers – following the recent merger of Mitsubishi into the Nissan-Renault business – Mr Signoriello said the companies would share “backroom” operations such as warehousing spare parts and logistics but “on the sales front we’re competitors, we’re completely separate”. 

 

Warranty timeline

Hyundai was the first brand in Australia to offer five-year warranty across the range, introducing the extended coverage in 1999.

Mitsubishi was second with permanent factory-backed five-year coverage, from December 2004.

Hyundai’s sister brand Kia introduced a permanent factory-backed seven-year warranty across the range from October 2014. 

Since then, all other Top 10 brands have introduced five-year coverage.

The roster of car companies moving to five-year warranties in 2018 included Volkswagen (December), Mazda (August), Holden (July), and Ford (May).

Subaru and Toyota followed with five-year warranty coverage in January 2019 while Nissan rounded out the Top 10 by adopting five-year coverage in April 2019, to coincide with the start of the Japanese financial year.

As part of its relaunch, emerging Korean car maker Ssangyong boosted warranty coverage from five years to seven in September 2018, matching Kia’s industry-leading seven-year coverage introduced in October 2014.

Citroen adopted a six-year warranty in July 2014 but that coverage was wound back to three years in November 2017 after a change of distributor in Australia.

However, following a backlash, the importer of Citroen and its sister brand Peugeot increased warranty from three years to five on all models except vans from February 2018.

Honda introduced a five-year warranty in July 2017, and has since done monthly sales campaigns offering seven-year coverage on selected models.

Jeep launched its 'There & Back Guarantee' five-year warranty in February 2017.

Volkswagen’s sister brand Skoda moved to five-year warranty in January 2017.

Isuzu launched a five-year/130,000km warranty on its D-Max ute in January 2013 and the MU-X SUV gained the same coverage when it was introduced in November 2013.

Renault has had five-year warranty on passenger cars – but not sports models or vans – since April 2011.

In August 2018, Hyundai Australia executives told media the company was considering increasing its warranty coverage from five years, in response to other brands eroding what was once a marketing advantage.

As this article was published, Kia remains the only brand inside the Top 10 with permanent seven-year warranty coverage across its range.

Joshua Dowling

Joshua Dowling has been a motoring journalist for more than 20 years, spending most of that time working for The Sydney Morning Herald (as motoring editor and one of the early members of the Drive team) and News Corp Australia. He joined CarAdvice / Drive in 2018, and has been a World Car of the Year judge for more than 10 years.

Read more about Joshua DowlingLinkIcon
Chat with us!







Chat with Agent