Volkswagen is ditching its industry-leading 6-year/72,000-mile bumper-to-bumper warranty, reports Automotive News. The automaker is dropping coverage to 4 years/50,000 miles, but to sweeten the pot, it’s adding two years of free, factory-covered maintenance. The new program begins on 2020 model-year vehicles.
Established in 2017, the original six-year warranty plan helped VW stand out from the crowd when it was reinventing itself after dieselgate and launching the new Atlas crossover. While it was intended to bring back consumer confidence in the brand at a critical time, the warranty was never a big deciding factor for buyers. “More than half our Atlas customers became aware of it in the dealership,” said Duncan Movassaghi, senior vice president of sales and marketing for the Volkswagen brand’s North American region.
Instead of an extra two years of warranty coverage, VW customers will benefit more up front with free oil changes for the first two years. That means lease customers are getting a better deal. VW also hopes free maintenance will drive in customers who cite cost of ownership as a major purchasing factor, Movassaghi told AN.
VW wants to help out its dealers, who according to NADA surveys and surveys from buy/sell agents, have some of the lowest profit margins among mass-market brands. A new advertising program will pay dealers up to $200 per vehicle to help them “develop their local markets.”
VW’s warranty remains competitive, but it’s no longer at the top of its game. Ford, Honda, Nissan, Subaru, and Toyota all offer 3-year/36,000-mile warranties, but Hyundai and Kia provide coverage for 5 years/60,000 miles.
Source: Automotive News (Subscription required)
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