Warranty Claims Decline for Domestic Automakers

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Ford, GM and Chrysler have managed to cut their warranty claims substantially in recent years, but consumers’ perception of a quality gap continues.

GM has seen reduced warranty claims of 45% from 2007 and Ford has slashed warranty repair rates by an average of 40% in each of its global business regions, according to initial quality reports. Meanwhile, Chrysler — plagued with the most quality troubles — had warranty claims fall 48% in the past two years, according to internal data. While some of these gains are because of the sales slump caused by the recent economic crisis, independent quality studies have shown the Big Three making gains over the same time.

Reduced warranty claims save automakers a few hundred dollars per vehicle and boost resale values, which add to an automaker’s operating profit.

While saving money is great, American automakers must also figure out how to close the quality perception gap that exists between their brands and foreign competitors. GM had three models — the Cadillac DTS, Buick LaCrosse and Buick Lucerne — ranked among the vehicles with the fewest problems in 2010 in a J.D. Power and Associates study, but Buick and Chevrolet trailed nine other brands in ALG’s 2010 survey of consumer perceptions.

While Toyota’s recent recall troubles may act as an assist, expect future ad campaigns from Ford, GM and Chrysler to highlight quality gains as those automakers attempt to turnaround consumer perception of their brands.

Warranty Claims Fall for Big 3 (Detroit News)