Archived Copies of Warranty Week

January 1, 2020 to today

Warranty Snapshots of Planes & the Building Trades: Unlike the passenger car industry, there is no clear trail of pandemic-induced calamity in the warranty metrics of the building trades or the aerospace industry. It hasn't been a good year for many manufacturers, but it hasn't been the Worst Year Ever, as it has for many students and workers, not to mention all the families that lost their loved ones.
November 19, 2020
Truck, RV & Car Warranty Snapshots: The pandemic lockdowns hit the consumer vehicle makers hardest, and the farm equipment makers the least, as one would expect when commuting to the office is forbidden and food becomes an essential business. The good news is that the downturn may have hit bottom in the second quarter, with third-quarter data pointing towards a V-shaped recovery, as both sales and warranty accruals rise proportionally for many companies.
November 12, 2020
Apple's Warranties & Service Contracts: In its brand new annual report, the company details its declining product warranty expenses while providing financial clues that suggest its market-leading extended warranty program had a really good year.
November 5, 2020
Mid-Year HVAC & Appliance Warranty Report: Some industries saw sales plummet and warranty expense rates soar. Appliances and HVAC systems weren't among them. Some of the individual companies are posting big shifts in their warranty metrics, but they seem to have more to do with acquisitions and divestments than they do with the effects of the pandemic. This is definitely not the auto industry.
October 29, 2020
Mid-Year Aerospace Warranty Report: While a big merger and a big spin-off have clouded the industry's warranty metrics, making year-to-year comparisons tricky, it's still pretty clear that the pandemic has hit aerospace companies hard. But the grounding of the 737 MAX a year before the lockdowns certainly didn't help.
October 22, 2020
U.S. New Home & RV Warranty Report: Last time, the recession hit these industries hard. This time, there's been an impact, but not as severe, at least when looking at their warranty metrics. RV sales have tanked again, but new home sales are actually rising, even in the midst of the pandemic lockdowns and the work-at-home mandates.
October 15, 2020
Top 100 Warranty Providers of Mid-2020: As we detailed in last week's newsletter, sales are falling faster than warranty expenses, so the average claims and accrual rates are rising. But that's just the average. Some companies are actually seeing sales increases, and for others so are their warranty costs. This week, we rank those changes, and spotlight the ten biggest percentage increases and decreases.
October 8, 2020
Worldwide Heavy Equipment Warranty Report: Though the warranty expenses of the manufacturers rise and fall with the ebb and flow of construction and mining activity, many of the warranty managers have done a good job keeping expensed proportional to sales. Still, there are a few surprises in the worldwide data we've compiled.
October 1, 2020
US Auto Warranty Expenses: During the Great Recession, vehicle sales fell faster than accruals but slower than claims, so claims rates slowly rose while accrual rates slowly fell. During this pandemic, however, claims rates jumped quickly, while accrual rates are holding steady. But sales are plunging just like they did 12 years ago.
September 24, 2020
Are Retailers Paying Too Much for Their Extended Warranty Programs? In order to maximize retail margins and customer loyalty in a post-COVID-19 world, retailers will need to reconsider every aspect of their operations, from floor planning, staff training, vendor management, and customer engagement strategies, to their extended warranty programs.
September 17, 2020
Worldwide Auto Warranty Expenses: Now that most of the world's automakers publish their warranty expenses in their annual reports, it is possible to tally a global total for the industry. In 2019, claims were up but accruals and reserves were down, as were the number of vehicles sold and the product revenue they brought in worldwide.
September 10, 2020
Asian Auto Warranty Expenses: While the Japanese and Indian car manufacturers had plenty of time to react to the global pandemic in their most recent fiscal years (which ended in March), the Korean and Chinese companies also seem to have seen it coming. Warranty accruals are down along with sales, and so are reserves, while claims are up. But the Chinese warranty metrics remain baffling.
September 3, 2020
European Auto Warranty Expenses: Among the seven largest auto manufacturers, VW spends the largest percentage of revenue on warranty. Daimler spends the most per vehicle, and had the biggest jump in warranty reserves. And both PSA and Renault continue to have the lowest warranty expense rates in Europe.
August 27, 2020
American Auto Warranty Expenses: In this first part of a worldwide automotive warranty report, we find last year's slowdown turning into this year's slump. But the warranty expenses of the top U.S.-based automakers were actually up last year, and have failed to fall as fast as sales did this year, leading to increased expense rates.
August 20, 2020
Worldwide Jet Engine Warranty Report: While many of the engines for today's jet airliners are made by diverse conglomerates, there are a few "pure play" turbofan makers that bear watching. And even some of those conglomerates are shedding some of their non-aviation businesses to focus on commercial aircraft.
August 13, 2020
Worldwide Aviation Warranty Expense Report: If you assumed that warranty expenses in the aviation industry is proportional to market share, you'd be way off. Companies with comparable market-leading sales totals have vastly different warranty costs, and some of the leaders in certain metrics have much smaller market shares in sales.
August 6, 2020
First Quarter Homebuilder Warranty Report: Those who expected a free-fall because of the lockdowns are likely to be pleasantly surprised how non-dire the data looks so far in early 2020. Then again, reports from the second quarter, which ends next week, are expected to show more extensive damage, in spite of all the partial reopenings.
June 25, 2020
Solar & EV Warranty Report: Because the new vehicles and power generation systems that rely on renewable energy sources are new, their warranty expenses are somewhat unpredictable. But the warranty metrics for some manufacturers are beginning to settle down, and the average expense rates are pleasantly low.
June 18, 2020
Building Materials Warranty Report: The warranty expenses of most companies in this industry are reasonably steady and predictable. Charts for both the total expenses and the average expense rates are fairly flat, compared to most industries.
June 11, 2020
Appliance Warranty Expense Report: While the HVAC industry is known for its long warranties and low warranty expense rates, the household appliance industry is known for its volatility. In 2019, claims fell and accruals rose, but the big news is the jump in expense rates seen in early 2020, caused by a recall in Europe.
June 4, 2020
HVAC Equipment Warranty Report: The big news is that after years in which most of the top HVAC companies were part of much larger conglomerates, now we have two new "pure play" industry members after the latest round of spin-offs and divestments.
May 28, 2020
Semiconductor Warranty Report: After a sudden jump in claims in 2018, warranty expense rates took a jump early last year. But by year's end, both the amount of money going towards warranty costs as well as the percent of sales it represented were back down to normal ranges. But warranty reserves haven't been this low since 2009.
May 21, 2020
Telecom Equipment Warranty Report: Warranty claims, accruals and reserves rose a bit from record low levels in 2018, but the long-term decline in the telecom network hardware industry continues unabated. Several mergers contributed to the recent increases, while some of the largest industry players continue to increase reliability, cut costs, and drive down their warranty expense rates.
May 14, 2020
Medical & Scientific Equipment Warranty Report: The amount of warranty expense reported by these manufacturers has never been lower, but their expense rates have been slowly rising for the past few years after more than a decade of cost reductions. Even though it's last year's data, the importance of low failure rates has never been higher.
May 7, 2020
Computer Warranty Report: Warranty accruals and reserves rose for the first time in years, but the long-term decline in the computer hardware industry continues nevertheless. Apple and HP see only minor changes in their warranty metrics. But some of the top disk drive makers are seeing expenses rise significantly.
April 30, 2020
Aerospace Warranty Report: The big story was Boeing, which was caught in the perfect storm of rising expenses and falling sales. But across the industry, warranty claims and accruals were up after years of slow declines. And expense rates rose as well, though not as high as the levels they were at a decade ago.
April 23, 2020
Seventeenth Annual Product Warranty Report: For a variety of reasons, claims and accruals continue to grow in the vehicle sector and shrink in the electronics sector. But sales have grown faster, so the overall share of manufacturing revenue going towards warranty expenses remains below 1.5%. Warranty reserves, meanwhile, came close to setting a new high water mark late in 2019, after years of declines.
April 16, 2020
Top 100 Warranty Providers of 2019: Though the very largest manufacturers and warranty providers rarely report massive changes in their warranty metrics from one year to the next, at least a few of the mid-sized companies always seem to report cutting their claims and accrual expenses in half. And 2019 is no exception, with major warranty cost reductions reported by several manufacturers.
April 9, 2020
Extended Protection Plans: Change what you think is working. A truly effective extended protection plan program should harness predictive analytics. Failing to optimize extended protection plans could mean leaving money and valuable data on the table.
April 2, 2020
Auto Parts Supplier Warranty Report: Slowly but surely, the companies that manufacture powertrain components such as engines and transmissions have seen their share of the warranty expenses rise, while the other parts suppliers have seen their share slowly shrink. And both claims and reserves are at record levels.
March 26, 2020
Truck Industry Warranty Metrics: Claims are up but so are sales. Warranty reserve fund balances hit a new high at the end of 2019, and claims came close to doing so. And extended warranty sales continue to soar for most of the top on-highway and off-road truck, bus, industrial, construction, and farm equipment manufacturers.
March 19, 2020
Homebuilder Warranty Report: As happened in 2007, the warranty metrics of the U.S.-based single-family home builders seem to have hit a bit of a plateau in 2019. Unit sales and warranty claims are up, but all the other metrics are little-changed from 2018 levels. And now, it's hard to imagine how 2020 will turn out.
March 12, 2020
U.S. Auto Warranty Metrics: In 2019, warranty metrics improved for Tesla and deteriorated for GM and Ford. While Tesla still sets aside the most funds per unit sold to finance future warranty costs, its current claims rate is one of the lowest in the business. And while GM and Ford spend less per vehicle, their vehicles also cost less, and their costs have been rising for several years in a row.
March 5, 2020
Machine Learning in Warranty Management: Quite a few companies talk about machine learning as the next step to improve warranty management. However, in more detailed discussions, I haven't come across too many real solutions or active projects in that field. In this article I will discuss the topic in more detail -- what is machine learning, what are the comparable use cases in other areas, and which could be the most compelling applications for it in warranty management.
February 27, 2020
Warranty Claims & Reserves, Part 3: While some of the sub-groups within the buildings category are dominated by companies such as Whirlpool, Carrier, and GE, others contain dozens of similarly-sized manufacturers. And while some of their warranty metrics are all over the chart, others are clumped into relatively tight clusters, like a marksman who never misses his target.
February 20, 2020
Warranty Claims & Reserves, Part 2: The electronics sector tends to have shorter warranties than other sectors such as vehicles. Yet their warranty costs have ranged all the way up to four percent of sales. And while the average size of their warranty reserves is on the small side, some industry segments keep very large balances.
February 13, 2020
Warranty Claims & Reserves, Part 1: Using three metrics: claims, reserves, and sales, we can calculate which industries and even which individual companies are over or under the averages for both their spending on claims and the capacity of their reserve funds. And by charting the results, we can see which companies, industries or manufacturing sectors have the most consistent warranty expenses.
February 6, 2020
Warranty Expense Inflation: Prices rise and so does the cost of warranty. Over the past 17 years, prices in dollars have risen almost 40%. If we were to adjust warranty expenses for inflation, it makes the most recent claims and reserve data look a bit worse.
January 30, 2020
Product Warranty Sectors: By dividing all warranty-issuing companies into three groups -- vehicles, buildings, and electronics -- we can look at trends over time in terms of claims, accruals, reserves, and the percentage of sales revenue spent on warranty expenses. And we can also see that those expense rates have recently taken an upturn for some of them after years of declines.
January 23, 2020
The Biggest 9-Month Warranty Expense Rate Changes: While we can't directly compare one company's warranty expense rates to another's, we can compare each company's current metrics against their year-ago levels. And then we can compare the size of the changes, to reveal which companies are seeing costs fall and which are seeing them soar.
January 16, 2020
Warranty Marketing & Millennials: Dan Hulkower, the Senior Vice President at After, Inc., explains how to effectively engage the Millennial buyer. They don't trust traditional advertising but they love to search for coupons and discounts. They like blogs, social media, and online shopping, and they love to both read and write online reviews. And they actually open the direct mail they receive.
January 9, 2020