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Sam Charlwood25 Jun 2018
NEWS

Volkswagen Australia “looking hard” at five-year warranty

VW considers warranty extension as manufacturers embrace changing consumer sentiment

Volkswagen is set to join the growing five-year warranty club in Australia, in a move that could prompt extensions among more European manufacturers.

In the past year alone, Ford, Renault, Peugeot, Citroen and Honda have upped their warranty coverage to five years, while Holden increased its offering to seven years.

Volkswagen-owned Skoda, which is distributed through the same Australian dealer network, also introduced a five-year scheme in January, 2017.

Now, Volkswagen Australia is re-assessing its offering, brought about by changing consumer expectations. VW boss Michael Bartsch told motoring.com.au that he was examining the issue closely.

“We are looking hard at this,” he said. “Equally, while we currently have three year warranties in place, we work very closely with our dealer network to address any issues that may arise after expiration of warranty.”

Volkswagen’s current three-year, unlimited kilometre warranty has stayed unchanged since it was first introduced to Australia in September, 2010. It also offers a service for customers to extend their warranty to five years/unlimited kilometres for an extra fee.

Since that time, Volkswagen has endured the infamous 'dieselgate' scandal – one which, admittedly, hasn’t caused the sales collapse many had anticipated. It is understood Volkswagen’s re-evaluation of warranty isn’t a grab for salvaging customers, but rather, meeting changing customer expectations.

While Volkswagen is considering an extension, many other manufacturers are steadfastly sticking to three year schemes. Toyota Australia says its customers are happy with the current three-year model, and sees no need for an increase.

Mercedes-Benz Australia believes its three-year schedule is likewise well suited to customers.

“It’s often a discussion point, though there’s nothing planned at the moment,” said Mercedes-Benz corporate communications manager David McCarthy.

“A huge majority of our customers turn their vehicles over at three years anyway, so the demand isn’t huge.”

Volvo is also staying put on a three-year scheme, citing the fact that in other countries, new car sales are supported by a lesser two-year warranty.

BMW Australia said it was constantly looking at the market and at competitors. Already, its condition-based servicing schedule has struck a chord with consumers locally.

"With condition-based servicing, customers are not having to front up every 5000 or 10,000 kilometres for a service," said BMW Australia corporate communications boss Lenore Fletcher.

"From that point of view, the deal for a whole of life costing in terms of warranty and servicing for a BMW is pretty good. One of the big stops to a European vehicle used to be the cost of servicing but that's not the case anymore.

"In terms of warranty we will be monitoring what the market is doing. We're always listening to our customers as well."

Conversely, other manufacturers – most notably Kia (seven years) and Hyundai (five years) – have cashed in on their longstanding extended warranties, winning over droves of customers and helping effect change in the Australian car industry.

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