Volvo Australia mulls five-year warranty

Volvo could be the first major premium auto brand in Australia to follow the mainstream market’s move to a five-year warranty.

Separately, the brand has also signalled it will reduce its service pricing in reaction to consistent criticism of its expense.

Most luxury brands offer a three-year unlimited warranty, but Volvo Car Australia managing director Nick Connor told carsales.com.au that could change soon.

“We haven’t made a formal decision on that but I do see it as an opportunity for Volvo,” he said.

Moving to a permanent five-year warranty in Australia would be a world-first for Volvo and would also place it ahead of all of its key rivals in Australia.

Except for Tesla (eight-year/160,000km), Ferrari (seven-year/unlimited km), Rolls-Royce (four-year/unlimited km) and Lexus and Infiniti (both four-year/100,000km) all luxury brands offer only a three-year warranty in Australia.

“The question is what is our incentive to do it?” said Connor. “The answer is it wouldn’t actually cost us very much money because our warranty claims are very low.”

“Could it be a differentiator for us? Yes definitely.”

Connor said he was aware of persistent media criticism of VCA’s servicing costs.

“I have to thank the journalists of Australia for that,” he said.

“I would read these fantastic reviews of the XC40 and XC60 and the only caveat would be about high servicing costs.”

Connor said VCA’s service costs were justified by the significant amount of content offered in them, but conceded they concerned consumers.

“We are aware of that and we are doing something about it pretty soon,” he said.

“Basically, we are lowering the cost of our servicing and we will be offering better-priced fixed servicing plans as well.”

Volvo offers three-, four- and five-year servicing plans. Under the more expensive SmartCare Plus option the popular XC60 costs $3050 for three years and $6400 for five years, payable up-front.