Warranty Week

Our 21st Year of publication!

Recent Newsletters

March 2023
  • U.S. Auto Warranty Expenses: Warranty metrics stabilized for the U.S.-based small vehicle manufacturers after two tumultuous pandemic years darkened by recalls. Warranty reserve balances and total claims paid reached record highs, while the claims and accrual rates were moderated due to increased product sales across the board.
    March 23, 2023
  • Twentieth Annual Product Warranty Report: With 99% of companies reporting, we begin to look at the annual 2022 warranty data, and present our new series of 20-year charts. Warranty claims, accrual, and reserves totals continue to set records in the vehicle and building trades sectors, while the electronics sector shrinks. Claims totals were up, and though accruals were down overall, they remain erratic in the wake of the unexpected expenses and losses of the pandemic.
    March 16, 2023
  • Wind Turbine Warranty Report: It's been a tough few years for the largest global wind turbine manufacturers, revealing high warranty claims and accrual rates. Chinese companies have rapidly expanded their market share, while the European and American giants are attempting to streamline their businesses in the wake of some public product failures.
    March 9, 2023
  • Women Of Warranty: The demographics of our industry are shifting, with more women and young people taking on roles. Angie Breedlove has formed a new group, Women of Warranty, to encourage and foster gender parity in warranty, especially in management and executive positions. The group will emphasize mentorship and networking.
    March 2, 2023
  • February 2023
  • Largest Nine-Month Warranty Reserve Fund Changes: Continuing last week's analysis of the top 110 U.S.-based manufacturers, we are comparing each company's warranty reserve balances to their year-ago levels. Comparing the size of these changes reveals a fuller picture of which companies have had a challenging or exceptional nine months.
    February 16, 2023
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    Latest Warranty Week Headlines

    Selected Newsletters

    World's Largest Warranty Problems:

    On the one hand, U.S.-based manufacturers are required to disclose their warranty expenses to investors. On the other hand, they try their best to obscure the news and bury it in plain sight when something really expensive happens. But as the saying goes, a picture's worth a thousand words. And in the charts that follow, it's hard to hide a billion-dollar warranty problem.

    Over the past few years, every once in a while, a set of warranty expense numbers comes in that makes us wonder if there's been a typographical error in a company's annual report. Suddenly, there's a billion-dollar warranty expense and there's no explanation at all anywhere in the document.

    Other times, a major safety recall or some other big event makes the news, and inevitably it gets reduced into a major escalation in a company's warranty expenses. For these, we don't need any additional explanations, but we never do find out exactly how much it costs.

    Mize Merges With Syncron:

    What began as a discussion about how a warranty management and field service solution could be bolted onto an aftermarket service and parts management software platform has culminated in an international merger between an American and a Swedish software company.

    The news broke yesterday that Mize Inc., the warranty management software firm founded by Ashok Kartham, is merging with a Swedish company called Syncron AB that specializes in aftermarket and service parts management software. Both companies are privately-held, so there were no details about the value of the transaction or the ownership structure following its conclusion.

    Kartham founded Mize in 2012, taking the name from the phrase "Mobilize to Monetize." It was his second go-round at entrepreneurship, having founded the warranty management software industry when he launched 4C Solutions Inc. way back in 1995, when everybody else was using spreadsheets. Ten years ago, after building up 4CS and the warranty management software category, he sold the company to PTC, and moved to Florida, where he decidedly refused to sail off into the sunset.

    Consumer Reports' 2006 Extended Warranty Ad:

    There was panic in the industry when one of the most trusted consumer advocates told its readers not to buy extended warranties. Ten years later, the magazine's advice is almost forgotten, and the industry is bigger than ever.

    In a few weeks we'll be marking a very important anniversary in the service contract industry. Just as the holiday shopping season of 2006 was getting under way, a major consumer product ratings publisher told shoppers that extended warranties were a waste of money. On Tuesday morning, November 14, 2006, the USA Today newspaper carried on the back page of the "Money" section (page 10B), the following full-page ad placed by Consumer Reports magazine:

    Figure 0

    Reaction was swift. Some said both the frequency of breakdowns and the average cost of repair was higher than Consumer Reports was calculating, making service contracts a better value than was admitted. Others said it was simply a matter of price, in that nobody would deny the value of a service contract priced at 0% of the product's price (in other words, free).

    VW's Emissions Warranty Scandal:

    Some students cheat on tests. But companies rarely do, because the cost of getting caught is very high. And in the long run, someone usually snitches. So isn't it ironic that a bunch of students caught one of the world's largest manufacturers cheating on a test?

    At Volkswagen AG, the world's largest passenger car manufacturer, and the world's largest warranty provider, with some of the industry's highest warranty expense rates, things just went from bad to worst. The company, which spent 7 billion euro (US$7.9 billion) last year on warranty claims, could end up paying an additional US$3.6 billion in claims and fines to fix a major problem with almost half a million diesel cars that have been found to be illegally polluting the air.

    It all started last May, when the International Council on Clean Transportation, a small nonprofit organization focused on the reduction of vehicle emissions, and a research team at the Center for Alternative Fuels Engines and Emissions within West Virginia University, documented the discrepancy between test levels and real world nitrogen oxide (NOx) emissions levels from new passenger cars equipped with diesel engines.

    Extend Partners with PCMI:

    The way they've implemented their administration system allows online merchants to add protection plan programs to their websites in a matter of days. Hundreds of retailers have already done so, including Peloton, Advance Auto Parts, Logitech, and iRobot, plus some that are no bigger than a mom-and-pop storefront on the Shopify platform.

    There are two big problems for warranty administrators: On the front end, it is difficult to cost-justify the amount of coding work it takes to set up small merchant accounts, and on the back end, it is difficult to change or add insurance underwriters.

    PCMI, a longtime sponsor of this newsletter, aims to fix both those problems. Its Policy Claim and Reporting Solutions (PCRS) software, which has been used to administer more than 50 million extended warranties and service contracts, and to process more than 23 million claims, allows administrators to work with hundreds of small merchants and add multiple insurance underwriters.