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Hyundai still not sold on permanent seven-year warranty

Hyundai is holding back on rolling out a permanent seven-year warranty across its range to match sister brand Kia.


This comes even though it was the pioneer of longer vehicle warranties, establishing five-year coverage more than 20 years ago.


Hyundai introduced a seven-year warranty on most models in its range from October through to the end of December in 2019, and has applied the extra coverage intermittently to a smaller number of models in the first half of 2020.

However, the boss of Hyundai Australia, John Kett, says there are no plans to permanently increase the warranty from five to seven years across the range.

“We ran it late last year for a period of time,” said Mr Kett, who added that while “it did well for us … it wasn’t overwhelming”.

 

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Mr Kett said Hyundai had recently trialled seven-year warranty on certain passenger cars but not SUVs and it “hasn’t really damaged” sales of vehicles that had only five-year coverage.

One of the stumbling blocks is cost. Car companies must set aside extra funds at the time a new vehicle is sold to cover longer warrant periods.

Some car companies prefer to use those funds on discounts or marketing campaigns, or put them towards longer warranty coverage.

“If you make (seven-year warranty) permanent, the way the accountants look at it, you have to book it (put money aside) all up front,” said Mr Kett.

 

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The Hyundai executive said seven-year warranty was discussed monthly but “we’re just monitoring” at this stage.

“We keep looking at it,” said Mr Kett. “It’s not something that so obvious to us that we must do it. We were fixated on it for a while but (not any more).”

Kia was the first brand to adopt seven-year warranty coverage, in October 2014 and has posted sales gains every year since.

Although warranty coverage alone does not drive market growth, Kia has more than doubled sales in the five years since in introduced longer coverage, from 2014 to 2019.

Warranty timeline

Hyundai was the first brand in Australia to offer a 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 years/unlimited kilometres on all models except vans (which have five year/200,000km coverage) 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 a 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 November 2017, Chinese car maker MG added seven-year warranty to selected SUV models while its older passenger cars retained six-year coverage. The brand switched to seven-year warranty across the range in March 2019.

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.

In December 2018 Mitsubishi added seven-year/150,000km warranty to the Triton ute (up from five years/unlimited kilometres) as a special offer but it was extended through to the end of 2019 and into the first half of 2020.

Most other models in the Mitsubishi line-up have had seven-year warranty offers since early 2020, though the extra coverage was not permanent or across the entire range as this article was published.

In October 2019, Suzuki increased its warranty from three years/100,000km to five years/unlimited kilometres.

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

In October 2019, Hyundai introduced a seven-year warranty across most of its model range from the beginning of October to the end of December 2019, and then intermittently applied the offer to selected models in the first half of 2020. As this article was published, Hyundai said it had no plans to move to a permanent seven-year warranty across its entire range.

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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.

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