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We won’t follow Mazda’s five-year warranty: VW

Three’s a crowd: Volkswagen’s passenger vehicle line-up is protected by a three-year/unlimited km warranty , but the company is not looking to increase its offer yet.

VW says it will stick with other German brands with continuing three-year warranty

8 Aug 2018

VOLKSWAGEN has reiterated that it will stick with a three-year/unlimited-kilometre warranty on all of its passenger vehicles in Australia for the time being, despite rival Mazda being the latest manufacturer to move to a five-year/unlimited kilometre warranty.
Speaking to GoAuto at the launch of the Tiguan Allspace in Melbourne last week, Volkswagen Group Australia managing director Michael Bartsch said that while the company would never say never, the cost of moving to a five-year warranty is something he would rather not pass on to consumers.
“Mazda do what Mazda needs to do,” Mr Bartsch said. “But if you have a look at what’s putting us on the consideration list, nobody is walking in saying ‘I need a five-year warranty’. We don’t lose sales at the moment. What happens down the track I can’t tell you. 
“Obviously we’ve thought about it, but right now there’s nothing for nothing. If you put in a five-year warranty now, or have sometime in the past or moving forward, you are going to have to factor that in to the cost of the vehicle. Right now, everything we’ve had in order to be able to position the car and optimise that has been done so we can hold that price point.”
Mr Bartsch added that in Australia, the Australian Consumer Law (ACL) covers new-vehicle buyers for five years, meaning that people who purchase a Volkswagen are covered anyway and without the extra cost that an official warranty adds to the bottom line.
“You can be a little bit cynical about it because there is a five-year warranty anyway,” he said. “It’s called the ACL. Every car has a five-year warranty. So, at some point, we can go ‘it has a five-year warranty’ but the reality is you immediately build that cost into the car, rather than put the things into the car that people value, and make it very clear to our dealers what their obligations are according to ACL and make sure that everybody is looked after according to our obligations and their rights as consumers.
“The other thing is that we tend to look up not down – we’re completely aligned with all the German brands and I think that’s more where we benchmark ourselves… it would be crazy for us to say never, but at the moment I would rather see the value built into the car.
“People buying our car are aspiring middle class, sitting just below the premium, so they’re looking at other things, they’re not buying the car for a five-year warranty, this is an aspirational product, this is not a white goods product.”
Despite staying put with the existing status quo for now, Mr Bartsch admitted that he is always assessing the mood of the market and is ready to change as required.
“Everybody gets nervous, and always looking over their shoulder,” he said. “(Longer warranties) all started with brands wanting to make a statement about positioning themselves and getting some traction in the market, and even Mazda has said not long ago that they didn’t need to do it because of ACL.
“I’m not going to say that we won’t. It would be disingenuous for us to say you don’t constantly look at all elements of your positioning in the market to make sure it’s right. It doesn’t matter who you are, you’re always watching that stuff.”
Since February this year, Peugeot/Citroen, Ford, Holden and Mazda have all moved to a five-year warranty, matching Honda, Hyundai and Skoda (part of the VGA), leaving Toyota as the only major mainstream non-premium player with a three-year (and 100,000km) warranty. Kia and Tesla still lead the pack with seven and eight-year protection schemes respectively. 

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