Hyundai mulling seven-year warranty

Hyundai has confirmed it is considering a seven-year factory warranty for its vehicles in Australia.

Currently, the Korean car-maker offers a five-year, unlimited-kilometre warranty Down Under, where Hyundai claims it was the first to do so – way back in 1999 when the ubiquitous Hyundai Excel was selling like hotcakes.

But now that five-year warranties are more prevalent – only three of Australia’s top 10 car brands do not have (at least) a five-year warranty – the company is considering an even longer factory guarantee.

In news that would provide buyers of new Hyundai vehicles – and their second or even third owners, in some cases -- more peace of mind, Hyundai Motor Company Australia CEO JW Lee today said his company is considering matching the seven-year warranty of its sister brand, Kia.

“Honestly, we are studying this,” said Lee at the national media launch for the 2019 Hyundai Tucson this week.

“Nowadays Mazda has announced five-year warranty. A five-year warranty is not a unique selling point for some customers [anymore] so maybe we need to consider how we can differentiate ourselves from the others,” he posited.

Of the top 10 most popular vehicle brands in Australia, only Toyota, Nissan and Volkswagen continue to offer three-year warranties.

But switching to a seven-year warranty is easier said than done, said Hyundai’s Australian chief.

“We may need to look at how we allocate our resources if we do a seven-year warranty. A seven-year warranty is not for free. We have to focus on this, we are studying this.”

Tesla has the longest warranty (albeit with restricted mileage) in Australia with an eight-year/160,000km warranty, while Kia has long offered a seven-year/unlimited-kilometre warranty.

There’s even talk that Kia may soon push to a 10-year warranty, as it and Hyundai already do in North America. Hyundai offers a seven-year/200,000km warranty in South Africa (pictured).

Lees said that a decade-long warranty was possible but not likely, pointing out that a “10-year warranty requires a huge amount of investment for customer service.”

Hyundai Australia’s external affairs general manager, Bill Thomas, stated that the Korean importer already pours a lot of resources into maintaining low-cost capped-price servicing with 12-month intervals in order to keep running costs low over the life of the vehicle.

“There’s also a significant investment in our lifetime [vehicle] service plan, which we know really resonates,” said Thomas.

With the advent of its Auto Link app, which has about 20,000 members and connects Hyundai cars to phones and a data centre, Hyundai’s CEO said the company can better measure customer mileage and use the data to decide how best to approach the duration of warranties and service costs.

Despite its now-substandard three-year/100,000km warranty, Toyota continues to thrive on its reputation for reliability, which begs the question: Does Hyundai need a seven-year warranty to maintain an edge in the Australian marketplace? Have your say in the comments below.