Exclusive Webinar :Don't miss the latest webinar on Global Investing with Passive Products on June 22, 11am

Automakers bet on extended warranty periods and schemes to woo customers

There is also a choice of warranties coming out of the used car market, another sector that has been growing considerably well in the recent past.

May 10, 2021 / 03:32 PM IST
Warranties are a good way to retain customers profitably

Warranties are a good way to retain customers profitably

While sales haven’t directly stopped, the current COVID-19 crisis has caused a great deal of stress in the auto industry. And with that manufacturers have to find new and innovative ways of sweetening the pot for customers, one of which seems to be warranties.

According to a report in ET Auto, warranties and extended warranties have become marketing tools with the sole intention of enticing customers with an added assurance of longer lasting products. This is prevalent in a lot of tech and electronics manufacturers and the auto industry has been trying to do the same.

Speaking to ET Auto, Shashank Srivastava, Executive Director at Maruti Suzuki said that an extended warranty acts as a customer retaining tool. “To adhere to warranty conditions while the customers used to come to authorised workshops in the warranty period, he used to abandon OEM network subsequently. Extended warranty is a good way to retain customers profitably.”

Speaking on behalf of Mercedes-Benz, Martin Schwenk, MD at Mercedes-Benz said, “Extended warranty in addition to driving value to the purchase also gives complete peace of mind and a hassle-free ownership experience to a customer.”

There is also a choice of warranties coming out of the used car market, another sector that has been growing considerably well in the recent past.

Close

Ashutosh Pandey, CEO of First Choice told ET Auto that a one-year warranty is currently the most popular and a growing number of customers are opting in for the warranty. “I see the adoption has suddenly increased,” he said.

While warranties are not the end-all in customer satisfaction, it does increase the perception of a more durable vehicle and in the case of a fault, allows for the customer to avail quality service at a reduced cost, if not free.
Moneycontrol News
first published: May 10, 2021 03:31 pm

stay updated

Get Daily News on your Browser
Sections