Archived Copies of Warranty Week

December 2002 to Today

Worldwide Auto Warranty Expenses: Most auto manufacturers have filed their latest annual reports, so the totals are in for 2021: $45.9 B in claims paid, a 2.4% claims rate, $54.0 B in accruals made, a 2.8% accrual rate, $128.4 B in reserves held, and $653 in accruals made per vehicle sold. Claims and accrual totals changed little last year, but because sales rebounded in 2021, the expense rates fell.
October 6, 2022
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
French Automaker Warranty Expenses: Renault has always kept its warranty expenses low, but three years ago PSA suddenly cut its costs by more than two-thirds. Now they're creeping up again as the makers of Peugeot and Citroen works to integrate the acquisitions of Opel and Vauxhall it made from GM.
August 8, 2019
Aerospace Warranty Report: Claims and accruals continue to fall for the top aerospace OEMs, though the warranty expense rates of aerospace suppliers has been rising for two years now. And the recent acquisition of Rockwell Collins by United Technologies has made the industry's largest warranty provider even bigger.
March 28, 2019
Japanese Auto Warranties: While Toyota, Nissan and Honda dominate, six other companies also pay claims and make accruals for cars, trucks and buses made in Japan, or made elsewhere by a Japanese company. And while none besides Toyota & Honda report all their warranty metrics, most leave enough clues for outside observers to plug the holes with estimates.
October 11, 2018
Mobile Home Warranty Expenses: While much of the industry collapsed a decade ago, the five large manufacturers that remained in business have made a steady comeback. Last year, claims and accruals finally surpassed their pre-recession peaks, even while most of the remaining manufacturers have been able to keep those expenses steady as a percentage of sales.
August 9, 2018
Automotive Supplier Warranty Report: Of all the companies that supply parts and components to the car and truck manufacturers, those making engines, axles and transmissions pay the most claims and see the highest warranty expense rates. Last year, in fact, they broke records for claims paid, accruals made, and reserves held.
April 12, 2018
WCM Conference Preview, Part 2: Travel plans are being made for the 14th edition of this annual warranty and service contract industry conference, which opens in less than two weeks. The agenda this year is a mix of both returning favorites and new topics suggested by both presenters and attendees at past conferences.
February 22, 2018
WCM Conference Preview, Part 1: The workshops are filling up, and travel plans are being made for the 14th edition of this annual warranty and service contract industry conference. The agenda this year is a mix of both returning favorites and new topics suggested by both presenters and attendees at past conferences.
February 15, 2018
Fourteenth Annual Product Warranty Report: Warranty expenses are down but sales are up, which means a lot of companies have learned how to improve their warranty processes, increase quality, and reduce costs. But the cost reductions have become less steady in recent years, as if there's no more progress to be made. Is that the case? Or is this merely a pause before the next breakthroughs arise?
March 23, 2017
Automotive OEM Warranty Report: While warranty expenses are down significantly among vehicle makers as a group, the real progress has been made primarily by Ford and GM.
April 17, 2014
Semiconductor Warranty Report: Unlike in most industries, with integrated circuits the production machinery generates most of the warranty cost while the actual products made by those machines generate less. However, the machinery makers have done a much better job of reducing their warranty expenses over the past decade.
May 2, 2013
Apple's Extended Warranties: Every once in a while, someone sues Apple over its sales of extended warranties. But they never quantify the amount of money involved. Turns out, it's huge, based on some assumptions we made using figures from the company's own annual reports.
January 17, 2013
Automotive Warranty Metrics: While the major OEMs have made great strides with their warranty cost reduction programs and with efforts to use warranty data to improve product reliability, their suppliers are struggling to get back to where they were before the recession hit.
September 13, 2012
Homebuilding Warranties: The data has yet to take an upturn, but at least it's not getting worse. Still, during the depths of the recession some of the homebuilders made some curious decisions about how much warranty expense they expected per new home sold.
August 16, 2012
Appliance & HVAC System Warranties: While they haven't made much progress with warranty cost-cutting, they also haven't seen much increase. And given all the financial problems reported by builders lately, merely staying the same looks good in comparison.
May 17, 2012
Aerospace Warranties: The makers of Boeings, Cessnas and Gulfstreams haven't made much improvement in the past five years. But their suppliers continue to boost revenue, cut costs, and reduce warranty expenses as a percentage of sales. And that divergence got worse as 2011 ended.
March 29, 2012
Consumer Electronics Warranties: Most of the best-known brands are imports. Most of the domestic brands are made by computer, appliance or telecom companies. Most of the emphasis is on sales of service contracts. So how can we analyze just the product warranty expenses of U.S.-based consumer electronics manufacturers?
January 26, 2012
Warranty Adjustments, Part 2: In the past few years, a small group of companies has made repeated and relatively large upwards adjustments to their warranty reserves. Are they simply bad at predicting the future? Or have they found a way to make their warranty costs look lower than they really are?
November 3, 2011
Warranties During Disasters: While warranties cover defects and insurance covers damage, there is quite a bit of overlap between the two. And in the past month, disasters and disturbances have made people aware that it really can happen to them.
September 1, 2011
Vehicle Service Contract Underwriters, Part 2: Numerous corrections need to be made, and multiple explanations need to be given, before we can move on to the final phase: Tracking the administrators. And it's becoming obvious that the reason there's so little market research on the VSC industry may be because there's so many moving parts to consider.
September 2, 2010
OEM Warranty & VSCs, Part 2: As we continue our tour of the vehicle service contract industry, we find that some of the cars the contracts cover are being made better than before. Still, it's increasingly the fortunes of third party administrators and underwriters that will be most directly affected by the reduced need for VSCs.
August 19, 2010
Chinese Drywall Woes: It smells bad and it ruins anything made of copper or silver. The gases given off by wallboard imported from China may also sicken homeowners and their families. Some say the affected homes will have to be gutted or bulldozed. But others say a simple solution is possible, if the focus is shifted to how the foul odor is produced.
December 10, 2009
Warranty Trends in 2008: With the filing of the last few financial reports of this cycle, it's time to look at warranty costs by industry. The big story in 2008 is how falling sales have made warranty claims less affordable for some companies. Warranty reserves peaked at the end of 2007, but claims are still rising. And for hard-hit sectors such as autos and homebuilding, the worst may still be ahead.
December 18, 2008
Top 100 Warranty Providers: Key ratios show how some manufacturers have made fairly radical changes in their warranty finances over the past year. But, like a dog that doesn't bark, what's remarkable is how few of the biggest warranty providers have seen relatively big increases or decreases since March 2007.
June 12, 2008
Five-Year Warranty Trends, Part Four: Warranty costs as a percentage of sales have remained rather stable since 2003. But while some industries are always below the overall average, others are always above it. And that depends not only on the product being made but also on the maker's spot in the supply chain.
April 17, 2008
Changing the Way We Think About Warranty Management: Warranty is a critical element of new product strategy. It not only provides assurance to customers, but also serves as a very effective promotional tool. A change in the approach to warranty management is needed so that warranty related decisions are made in the context of the product life cycle and take into account the interaction between warranty and other decision variables. This new strategic approach is similar to that which has transformed supply chain management over the last 10 to 15 years.
June 19, 2007
Top 50 Warranty Providers: While 20 saw declines in the percentage of revenue spent on warranty claims, all but 12 paid out more claims in dollars during the first half of 2005. Rising product sales made the difference.
August 30, 2005
Extended Warranty Profits: For many manufacturers, the sale of extended warranties contributes heavily to net income. But only a handful of companies have made the financial disclosures needed to figure out how important it really is to them.
October 26, 2004
Skatepark Warranties: Whether they're made of steel, plywood, plastic, or paper, the ramps and rails installed in skateboard parks are sold with a warranty. But whether the warranty lasts for a year or 20 years seems to have more to do with marketing than the strength of the materials used.
February 24, 2004
GM's Warranty Reserves:  Both GM and Ford made sizeable withdrawals from their reserve funds during the second quarter. GM cited increased product quality. But analysts said the move lowered earnings quality. Ford said nothing, and nothing was said. What's behind the changes of estimate?
August 18, 2003