Archived Copies of Warranty Week

January 1, 2014 to today

New Home Warranty Accruals: While the average homebuilder sets aside about one percent of revenue to cover warranty costs, the average new home is expected to cost around $2,500 over the life of its warranty. Luxury homes will cost more, but even some average-priced units have high warranty costs. It all depends on the builder.
December 18, 2014
Data Storage Warranty Expenses: While the traditional hard drive makers have more predictable and stable warranty costs, the newer solid state and flash memory systems seem to have lower costs. However, their price per gigabyte of capacity is much higher.
December 11, 2014
Auto Parts Supplier Warranties: Of course the drivetrain component manufacturers pay more in warranty costs than other kinds of automotive parts suppliers. But who knew that the automotive electronics manufacturers pay out almost as much as the drivetrain companies?
December 4, 2014
Truck, Bus & RV Warranties: Most of the manufacturers are finding ways to reduce warranty costs, but some of the recent increases have been spectacularly huge. Still, the OEMs pay out more than their suppliers do, though the gap is narrower than it is in the passenger car industry.
November 20, 2014
Chrysler's & Tesla's Warranty Adjustments: Compared to GM and Ford, their recent mid-course corrections to their warranty expense rates are modest. But for others, the relative size of these adjustments compared to regular accruals can be an early warning indicator of trouble ahead.
November 13, 2014
GM's & Ford's Warranty Adjustments: Both automakers have recently run into trouble, and have had to add hundreds of millions of dollars to their warranty reserve funds to pay for all the unexpected warranty work. But because it's unexpected, it doesn't show up on charts that track only the "regular" warranty accruals.
November 6, 2014
Apple's Warranty & AppleCare Programs: It's not the kind of thing the consumer advocates like to report, but one of the world's leading electronics manufacturers and retailers is giving its customers a break, paying more warranty claims, keeping extended warranty prices steady, and giving customers a better value proposition on their product protection plans.
October 30, 2014
The Post-Purchase Experience: More than just a buzzword, it's becoming an important part of customer loyalty. Consumers who feel their service contracts can provide a better level of customer service will buy them again, just for the convenience of knowing who to call when they need a repair.
October 23, 2014
Extended Warranty Conferences: As the old saying goes, two's company, but three's a crowd. With the Warranty Chain Management Conference a fixture in the spring, two conferences are competing to become the industry's preferred event in the early fall. This year, they were three weeks apart, but next year, there's only three days between them.
October 16, 2014
Mid-Year Service Contract Report: Consumers will pay nearly $40 billion this year for product protection plans, despite the best efforts of the watchdogs who tell them not to. It's mostly for smartphones and passenger cars, though, because everything else is perceived to be disposable and not worth fixing.
October 9, 2014
Mid-Year Warranty Expense Report: By comparing each company to itself over time, and then comparing the size of the changes, we can spot the companies with the most improved warranty costs and those in the most trouble.
October 2, 2014
Mining Equipment Warranties: Things haven't been the same for mining equipment warranty expense rates since the recession started, though they're now close to getting back to normal. The problem is that so many of them also make construction equipment, and that market was impacted severely by the downturn.
September 25, 2014
Appliance & HVAC Warranties: Expenses are down in early 2014, partially because of lower product sales and partially because of effective cost-cutting programs. But GE is leaving the business and the other top manufacturers are among the best cost-cutters. So expenses are likely to keep falling.
September 18, 2014
Homebuilder & Supplier Warranties: Unlike in the automotive industry, where the OEMs have compelled their suppliers to pay a larger share of warranty costs, the homebuilders are reducing their share by selling fewer new houses. It's the building material suppliers who have learned how to cut warranty costs by reducing their expense rates.
September 11, 2014
Computer OEM & Supplier Warranties: Are the computer OEMs paying a growing or shrinking percentage of the warranty costs of their industry? Are the warranty costs of their suppliers rising or falling as a result of their efforts to make them split the bill?
September 4, 2014
Aerospace OEM & Supplier Warranties: Unlike the automotive business, aerospace manufacturers seem to divide warranty expenses equitably between OEMs and suppliers, both as a percentage of their revenue and as a percentage of the total cost.
August 28, 2014
Supplier Recovery Efforts: Are the automotive OEMs paying a growing or shrinking percentage of the warranty costs of their industry? Are the warranty costs of their suppliers rising or falling as a result of their efforts to make them split the bill?
August 21, 2014
Asian Manufacturers' Warranties: While most consumer electronics products have relatively low warranty expense rates, as a percentage of revenue, computers generate as much warranty cost as passenger cars and major appliances.
August 14, 2014
European Manufacturers' Warranties: While most international manufacturers don't disclose their warranty costs, some of the largest European warranty providers do. And their warranty expense rates aren't tremendously different from those of their American competitors.
August 7, 2014
Material Handling Equipment Warranties: Most of the companies that manufacture equipment to handle, move and store materials have kept their warranty expense rates below one percent. But a few have expense rates far above that level, and some have expense rates that rise and fall dramatically.
July 31, 2014
Warranty Accruals for New Homes: Sometimes they set aside too much and sometimes they set aside too little. All but a few homebuilders seem to lack any sense of aim when it comes to determining how much to accrue for each new home they sell.
July 24, 2014
Warranty Accruals per Vehicle: Though currency fluctuations are a major factor, in 2013 both GM and Ford accrued less per vehicle sold than any of the European or Japanese OEMs. And though BMW and Daimler command a higher price per vehicle, they've accrued less and less per unit over the past decade as they continue to cut warranty costs.
July 17, 2014
Tavant Partners with Salesforce.com: As a platform heavy with sales force automation tools drives deeper into after-sales service and support, it gains a partner with a very deep base of knowledge in warranty management. And Tavant, gains a pathway into cloud computing and software as a service.
June 26, 2014
Sports Equipment Warranties: While the makers of sports-oriented vehicles are cutting their warranty costs, those who make the equipment used by players aren't making much progress. Most of them spend about the same percentage of sales on warranty costs now as they did a decade ago.
June 19, 2014
Solar Power Equipment Warranties: First Solar and SunPower have emerged as major warranty providers, building megawatt power plants in the desert. And Tesla Motors, while not solar powered, has emerged as a major warranty provider in the "green" energy industry. They're still not as big as GE or GM, but they're no longer small either.
June 12, 2014
Consumer Electronics Warranty Report: The traditional radio and TV makers are gone, and even laptops are giving way to smartphones. So it's no surprise to see the bulk of the industry's warranty expenses shift from Hi-Fi to Wi-Fi. But that expansion also drags in lots of business-to-business sales as well as heavily-exported product lines into the analysis.
June 5, 2014
Medical & Scientific Equipment Warranties: While most of the companies in this industry have relatively low warranty expenses, those whose equipment involves either X-rays or lasers spend a much higher percentage of revenue on claims. Yet those are the companies that have done the most to cut their warranty costs over the past decade.
May 29, 2014
Telecom Equipment Warranty Report: As the old guard making landline phone equipment declines, the makers of data communication equipment and smartphones are accounting for an increasing share of the industry's warranty expenses. Still, there's been an overall decline in both the expense totals and the expense rates.
May 22, 2014
Semiconductor Industry Warranty Report: In no other industry is the factory machinery so costly, and so expensive to maintain. And nowhere else does the output of the factory have such low warranty expense rates, compared to the machinery used to make it. It's as if the factory owners have shifted much of their warranty costs onto their equipment suppliers.
May 15, 2014
New Homes & Building Materials Warranty Report: As sales recover, warranty expense rates are getting back to normal for the builders. But some of their suppliers, such as the makers of electrical and plumbing fixtures, are now enjoying the results of a decade of warranty cost-cutting.
May 8, 2014
Computer Industry Warranty Report: Thanks to the popularity of smartphones, Apple is now the largest warranty provider in the U.S. But most other computer makers are cutting warranty expenses, as are most disk drive makers. Even Microsoft is getting over the Xbox warranty calamity it suffered through a few years ago.
May 1, 2014
Auto Parts Supplier Warranty Report: Turns out it's the large truck and bus manufacturers and their engine, axle and transmission suppliers who haven't done much to reduce their warranty expenses over the past decade. Passenger car makers and suppliers of auto parts besides drivetrain components have done a much better job of cutting costs.
April 24, 2014
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
Appliance & HVAC Warranty Report: While we group them together, they're actually very different. Appliance makers pay higher warranty expense rates but for shorter durations. HVAC makers keep larger reserves on hand but they have to, given their longer-lasting warranties.
April 10, 2014
Aerospace Warranty Report: The makers of the actual planes and helicopters haven't done much to reduce their warranty expenses but their suppliers have done a remarkable job with their cost-cutting efforts. In this week's report, we look at both groups together and separately.
April 3, 2014
Eleventh Annual Product Warranty Report: While some manufacturers are having trouble with product reliability, others are seeing their warranty expenses rise simply because they're selling more product than ever before. Case in point: the new holder of the title of world's largest warranty provider.
March 27, 2014
The End of Warranty Cost-Cutting? For ten straight years, manufacturers steadily reduced their warranty expense rates from over 1.8% of their sales revenue to under 1.3%. But in the eleventh year, the declines stopped coming. Could it be that there's no more left to cut? And have manufacturers instead begun to spend more on the customer experience?
March 20, 2014
m-ize Transforms the Warranty Experience: For years, cutting costs has been the main focus of warranty departments. As the economy turns around, companies are now changing the focus of their warranty spending onto improving the customer experience. Warranty can drive sales by providing a better service experience to increase customer satisfaction, loyalty, and repeat purchases.
March 13, 2014
New Approaches to Warranty Management: For many years it was all about cost reduction. Now, there's little left to cut. And both manufacturers and retailers are looking for ways to improve the customer experience by launching new types of protection services and new generations of warranty automation systems.
March 6, 2014
Service Contract Regulation Seminar: In addition to the customary annual update on service contract laws, regulatory actions and civil cases, attendees at the WCM Conference this year will get a detailed look at the CFPB and a snapshot of how service contract regulations work in Canada.
February 27, 2014
Manufacturer's Warranty Conference: More than anything, the WCM Conference is a place for manufacturers to meet and talk about problems and projects -- to see what everyone else is up to. Beginners learn from experts, and the experts learn from each other.
February 20, 2014
Vehicle Service Contract Conference: This year, it will be possible for an attendee at the WCM Conference to hone in on some high-level discussions about issues affecting the vehicle service contract industry. They used to do that in the fall at a show in Vegas, but that event has gone in a different direction.
February 13, 2014
Aerospace & Appliance Warranties: From airplanes to air conditioners, each industry has a typical cost of warranty based on the product it makes and what kind of customer it attracts. Business-to-business products such as airplanes have lower expense rates than consumer-facing products such as home appliances.
February 6, 2014
New Home Warranty Report: Sales are rising and home prices are increasing, but warranty costs are remaining the same. So the cost of new home warranties as both a percentage of sales and on a per-home basis are declining, in some cases to record low levels. Is this the beginning of a long-awaited recovery in the new home industry?
January 30, 2014
Computer Warranty Report: Traditional laptop and hard drive sales are declining, while smartphone and solid state storage sales soar. However, the change in product mix is raising warranty costs for some manufacturers such as Apple.
January 23, 2014
Large Vehicle Warranty Report: There's only a very narrow gap between the warranty expense rates of large vehicle manufacturers and their suppliers. And while some manufacturers are reducing their warranty costs, many are simply returning to the expense rates they've had for most of the past decade.
January 16, 2014
Automotive Warranty Report: For the first nine months of 2013, claims are up a bit from 2012 levels while accruals are down. More importantly, the percentage of revenue spent on warranty work is down as well. That means manufacturers expect to see lower warranty costs in the future, as they make more reliable vehicles that cost less to repair.
January 9, 2014