Hyundai to stick with five-year warranty for now

HYUNDAI Motor Company Australia (HMCA) has no plans to increase its factory new-car warranty from five to seven years on a permanent basis to match other brands such as Kia, despite continuously reviewing the case for extended coverage.

Speaking to GoAuto in Sydney last week, HMCA chief operating officer John Kett said that although the company occasionally uses a seven-year warranty on select models for promotional purposes, only a small number of consumers will forsake buying a Hyundai purely on the basis of its standard five-year warranty.

“We’ve continued a (seven-year) offer on two passenger cars,” he said. “One of them is the Elantra in runout in terms of giving it something unique in the marketplace and the other is the i30 … (and that’s because) it’s so well price-positioned in the marketplace, throwing any more money at it doesn’t sell any more cars so a seven-year warranty for it was good.

“(The question is) with the funds that we’ve got left, the products we need to launch and the role that warranty can play in the conversion process versus the consideration process, where do we want to spend our money?

“So, we’ve decided at this point of time that we’re going to go with increasing our marketing, the focus around our awareness generation, bringing greater visibility to our product and the contenting of our product, and seeing if there are any objections in the conversion process that we can overcome them upfront.

“We rarely lose on warranty-related issues unless somebody is cross-shopping us with Kia. We do lose there, but it’s not a big issue.

“I think our quality reputation is still pretty sound in the marketplace. If (increasing warranty) was free, we’d do it, but it’s not free, and it just chews up your discretionary resources, and you end up with no tactical money and no marketing money, and I just don’t want to do that.

“There is no pressing need to do it, but the conversation comes up consistently and I think we’ll need to continuously review it – where do we sit in our conversion versus all of our competitors versus where we sit in the consideration set versus all of our competitors, and from the intenders one or two years away, where do we sit in that regard, and is warranty playing a role or not there?

“It’s a bit of a long-term play, you need it to sit there for a long time for it to resonate strongly as opposed to just being tactical.

“It’s worked well for (Kia), so congrats to them, but we just haven’t prioritised our dollars to go into that space.”