Hyundai launches lifetime capped-price servicing

Hyundai has announced an industry-first lifetime capped-price servicing program, which caps the prices of all scheduled services for the entire life of every Hyundai vehicle ever sold in Australia – including more than 1.1 million vehicles sold since 1986.

Effective from Monday (September 1), Hyundai's new Lifetime Capped Price Servicing (LCPS) program is claimed to be the most comprehensive and transparent capped-price service schedule ever offered in Australia.

At the same time, it has extended its new-vehicle roadside assistance program from seven to 10 years, while maintaining its market-leading five-year new-vehicle warranty.

As well, Hyundai is now the only mainstream brand to introduce an online service booking system, via which customers can lock their vehicle in for service with their local dealer at the time of their choice.

In addition, Hyundai is also investigating a guaranteed residual value program like those offered by some luxury brands, in which the buy-back trade-in value of a new vehicle at the end of a certain period is guaranteed by the dealer.

Hyundai's new Lifetime Capped-Price Service (LCPS) program is an extension of the fixed-price service schedule it announced in August 2012. Since then, almost all mainstream brands have also announced CPS programs.

However, it goes beyond the first two lifetime CPS programs announced recently in Australia by Mazda and Subaru by covering all vehicles sold by Hyundai in its 28-year history here.

Last month Mazda extended its Mazda Service Select program to include lifetime CPS, but only for models dating back a decade to 2004, when the first Mazda3 was released.

Mazda says that covers most of its 'carpark', making its lifetime CPS program comparable. All Mazda models come with CPS, which replaces the previous six-month or 10,000km required service intervals with 12-month or 10,000km intervals, whichever comes first.

Meantime, Subaru became the last of Australia's 10 most popular brands to offer CPS in June, when it announced lifetime CPS for all Subaru vehicles dating back to the model year 2006 (meaning some cars bought in 2005).

Hyundai says retrospectivity isn't the only advantage of its LCPS, which is claimed to be cheaper and more convenient for owners of all Hyundais – private, business, government and rental buyers of all passenger, SUV and commercial vehicles.

In fact, it says it is spending $12 million annually to subside the cost of the first five annual or 15,000km services during its five-year warranty period, to make the price of each service more consistent.

For example, previously owners of small Hyundais would pay
$189 for each of the first three visits, before paying nearly $500 for the fourth, more comprehensive (60,000km) service, which was not previously subsidised by Hyundai.

Now, customers will pay more for the first three logbook services on a Hyundai small car ($229 for each visit), but the fourth one costs less than before at $329 and the subsequent service costs $229.

Apart from making each service more consistently priced and keeping Hyundai among the top three brands for service affordability, Hyundai says its LCPS makes small cars like the Accent cheaper to service on average than key rivals including the Toyota Yaris, Ford Fiesta, Holden Barina and Kia Rio.

With the exception of the Veloster Turbo, all Hyundai models require just one annual service, unlike some brands that require up to two annual services.

For example, small Toyotas like the Yaris and Corolla require six-monthly servicing – albeit at a cost of just $130 each – while the Camry and Aurion require a service every nine months.

Toyota was the first brand in Australia to introduce CPS, in 2008, but its program expires after three years leaving owners to haggle with service managers.

Meantime, the first four services for a Holden small car cost $189 each, but must be performed every nine months, while Nissan and Ford also offer CPS programs for older models, but charge more than Hyundai, Toyota and Holden.

Hyundai's LCPS program covers all engine types too, including diesels like the ix35, which now costs $400 per service except the fourth service ($500). All three of the Holden Captiva 5 diesel's capped-price services cost $500, and while the Ford Kuga diesel costs less than $400 for each service, its fourth service costs almost $800.

"The issues within the aftersales world are service price transparency and price consistency," said Hyundai Motor Company Australia Chief Operating Officer, John Elsworth.

"Capped-price service programs sort of solve that issue for a limited period – three, four, five years – but it's still an ongoing issue.

"So what we've done is introduces scheduled lifetime servicing, with prices available on our website, for the entire carpark of the million-odd cars that we've sold in Australia, and also every car going, forward for its entire life.

"What we have done is slightly increased the cost of the first three services and dramatically reduced the price of the first major service which is the fourth service or 60,000km on most cars.

"That's to try and solve the issue of peaks and troughs in service prices and budgeting. A key difference between us and others like Toyota is our servicing is annual and 15,000km.

"It does vary across other manufacturers. Some offer cheap servicing but you've got to do it twice a year and when you add up the net cost across the year we're typically under them because we only have to service a Hyundai once, which is also more convenient.

"There's only one exception to that which is Veloster Turbo, but we're basically under everyone for every model, petrol and diesel, over a year. We've tried not to have as many asterisks."

Elsworth said Hyundai's online booking system, to be rolled out for all dealers by the end of this year, is a first for a mainstream brand in Australia, although luxury brands including Jaguar and Audi offer a similar service.

"Booking cars in for service is also really clunky," he said. "Not only can you get different quotes from different dealers, but it is a pretty clunky process and you can't really do it online.

"We're probably the only big volume brand doing it now. It's quite complex to roll out because of the various dealer management systems that operate. A lot of work has gone into it.

"All our pricing will be on the website, but another key thing we've introduced is an online booking system. What it allows customers to do from the comfort of their own lounge room is to actually book a car in for service online.

"You're not just sending an email lead to a dealer. You're physically looking into the workshop diary, finding a time that suits your own diary, booking your car in with your preferred service advisor at the price available in the system.

"You get a shopping card back and reminders until the day you're due. You don't have to make a phone call and you're physically booked in. Nobody likes booking their car in for service so we're removing that burden."

Elsworth said a guaranteed residual value program was also on the horizon for Hyundai, but remained a work in progress.

"Guaranteed residuals is definitely on our radar but we don't have our own finance company in Australia so executing that is a little more complex. We're working with the bank that we deal with on a program. It's easier when you deal with your own bank."