Wait for Kia 10-year warranty is no more than 'automotive foreplay'
Could Kia be making some headway in its plans to introduce Australia’s longest new-car warranty?
The carmaker already offers a seven-year, unlimited mileage repair guarantee, and earlier in March the Korean challenger brand declared itself “ready” to extend this to a decade at a time of its choosing.
This has been a subject Kia has returned to again and again over the last year as more carmakers turn to their warranties as a crucial point of differentiation to woo new customers in a crowded market.
Since 2014 it has led the pack in offering the longest warranty, leading to impressive sales growth. It has doubled new-car registrations since it began offering seven-year terms that year, and now hovers a whisker away from a top-five place in Australia’s best-selling brands.
A year since Kia first mooted the decade warranty down under, one independent industry watcher has billed the wait as “a protracted period of automotive foreplay”.
“There’s no question that 10 years is on the cards, the only question is when,” said pundit John Cadogan. “But one key question that needs to be answered is why.”
Under Australian law, the acceptable quality consumer guarantee means that a vehicle needs to be acceptably durable, regardless of its warranty status.
For instance, if your engine fails three months after a five-year warranty ends, and you’ve had the car serviced properly and not abused it, it is up to the manufacturer to rectify the problem.
“That’s how the law is framed. I’d suggest those extended warranties are 90 percent about marketing and instilling confidence in consumers who might not be absolutely certain about buying a challenger brand like Kia,” Cadogan added.
It is arguable whether introducing a longer warranty period would be much more costly to Kia, given Australia consumer laws—the carmaker would have to look after appropriate maintenance anyway.
Kia doesn’t appear to be in a hurry to introduce the new warranty here, not least because its current seven-year flavour has coincided with such sterling sales growth.
Meanwhile, China’s MG offers seven years on some models, while other brands including Holden and Ford have been dabbling with their own warranty extensions. In light of these efforts to catch up, Kia management may well be paving the way for a 10-year deal at a time when the current margin no longer stands out from its competitors.