In our 22^nd year of providing the latest & greatest Warranty Information.

While the warranties issued for passenger cars and light trucks get all the attention, there is a huge warranty chain management operation on the commercial side, for the heavy equipment used in industries including construction, agriculture, and mining.

We're tracking the top 57 heavy equipment manufacturers worldwide, of which 23 include their warranty expense figures in their annual reports. Together, we estimate, these 23 OEMs accounted for about 83% of the worldwide heavy equipment industry's warranty expenses last year. So it's relatively easy to fashion estimates for the remaining 17%, and to create a report on their global warranty expenses.

In 2023, the global automotive industry saw significant increases in three of our five key warranty metrics: claims paid, accruals made, and reserves held. Global automotive product warranty claims paid and accruals made both grew by 17% from 2022 to 2023, while warranty reserves held by global automotive manufacturers increased by 14%. At the same time, the industry average claims and accrual rates increased only slightly, meaning vehicle sales revenue grew parallel to increases in warranty costs.

Warranty Week tracks the warranty expenses of 34 major automotive manufacturers around the world, which report some or all of their warranty metrics to investors in their annual reports. Most report the amount they pay in claims, the amount of accruals they make, and the end-balance of the warranty reserve fund.

The SEC annual report filing deadline for large companies was March 3, and the deadline for all filers was March 31. We've gathered data from all but a small handful of manufacturers that will file late, or perhaps not at all. And we can say with confidence that we've gathered over 99% of all available product warranty expense data from U.S.-based, warranty-issuing manufacturers. For the twenty-second consecutive year, we are happy to present our Annual Product Warranty Report.

For over two decades, we've tracked the product warranty expenses of over 1,400 U.S.-based manufacturers. This week, we're kicking off our series of 22-year charts with this overview of product warranty expenses by industry group. Over the coming months, we will delve deeper into the expenses of the companies comprising each of these industries.

Over the past few years, every once in a while, a set of warranty expense numbers comes in that makes us wonder if there's been a typographical error in a company's annual report. Suddenly, there's a billion-dollar warranty expense and there's no explanation at all anywhere in the document.

Other times, a major safety recall or some other big event makes the news, and inevitably it gets reduced into a major escalation in a company's warranty expenses. For these, we don't need any additional explanations, but we never do find out exactly how much it costs.

After news broke last month about the plans of General Electric Company and Johnson & Johnson to break themselves into three and two companies, respectively, it made us recall the break-ups of last year, when United Technologies Corp. and Ingersoll-Rand plc reorganized themselves into three and two units.

As we wrote about in the May 28, 2020 newsletter, our main interest in the break-ups of these conglomerates was how their subsequent financial statements would allow us to get a much clearer view of their warranty expenses, since the aerospace claims and accruals would no longer be blended with those of the air conditioning or industrial/building products lines of business. And now, with nearly two years of separate data in hand, that clearer picture has emerged.