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Worldwide Auto Warranty Report:

From 2023 to 2024, the total amount the global auto OEMs paid in warranty claims increased by 18%, the total amount set aside in warranty accruals increased by 11%, and the total amount held in warranty reserves increased by 10%. The industry average warranty claims and accrual rates increased as well.

Rising parts and labor costs, labor shortages, inflation, and currency devaluations drove up warranty costs for almost every global automotive OEM in 2024. This was the second year in a row where we saw new record high totals for all three warranty metrics.

Keep in mind that U.S. tariffs don't come into play in these data, since they were implemented in 2025. However, we expect global warranty costs to continue to rise due to these factors. In addition, global currency fluctuations and devaluations against the U.S. dollar, the currency we use for this newsletter, have impacted both the actual cost of warranty work, and the cost on paper when converted into USD.

Worldwide Heavy Equipment Warranty Report:

In 2024, the top global heavy equipment manufacturers paid about $6.15 billion in warranty claims, with an average claims rate of 1.37%, and set aside about $6.51 billion in warranty accruals, with an average accrual rate of 1.45%.

About half of the world's largest construction, mining, and agricultural equipment manufacturers report their warranty expenses. About three-quarters of the top ten largest global heavy equipment manufacturers report their warranty costs, including the top three OEMs, which collectively accounted for one-third of all global construction equipment sales in 2024: Caterpillar Inc., Komatsu Ltd., and Deere & Co.

We're tracking the top 55 global heavy equipment manufacturers, of which 23 include their warranty expenses in their annual reports. Together, we estimate that these 23 OEMs accounted for about 82% of the global heavy equipment industry's total warranty expenses. We then fashioned estimates for the remaining 18% of global heavy equipment warranty expenses racked up by the other 32 OEMs.

Twenty-Second Annual Product Warranty Report:

In 2024, the over 1,400 U.S.-based, warranty-issuing manufacturers we track paid an average of 1.329% of their total product sales revenue on warranty claims, and an average of 1.333% of their sales revenue on warranty accruals. Companies in the vehicle, electronics, and building trade sectors set aside $31.041 billion in warranty accruals, paid $29.176 billion in warranty claims, and collectively held $60.839 billion in warranty reserves at the end of the year.

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.

World's Largest Warranty Problems:

On the one hand, U.S.-based manufacturers are required to disclose their warranty expenses to investors. On the other hand, they try their best to obscure the news and bury it in plain sight when something really expensive happens. But as the saying goes, a picture's worth a thousand words. And in the charts that follow, it's hard to hide a billion-dollar warranty problem.

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.

Warranty Expenses When Conglomerates Break Up:

In early 2020, two diversified companies spun off product lines to become "pure plays" in specific industries. And now, seven quarters later, the warranty expense metrics of the five new companies, which were previously blended together, have diverged in very distinct ways.

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.

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Articles submitted to Warranty Week should address issues of importance to managers in manufacturing industries such as automobiles, trucks, consumer electronics, and home appliances that traditionally provide basic manufacturers' warranties with their products. More specifically, the articles should point out ways of improving the management of warranty programs, reducing warranty program cost, raising quality levels, reducing defect rates, improving response time, reducing warranty fraud, etc. If there is a common thread we look for, it would be the application of computer technology to the improvement of the warranty management process.

Through both a weekly email broadcast (over 7,000 recipients as of December 2017) and an online Web site (averaging upwards of 19,000 page requests per week), Warranty Week reaches an educated audience of thousands of warranty professionals worldwide. Most of this diverse and dispersed group of people are involved in warranty processing, from upper level (CEO, CIO, VP, GM) to middle-level positions (plant managers, department heads, engineers and consultants) in a vast cross section of manufacturers, dealers, retailers, third party plan administrators, insurance companies, software developers, and investors. What they have in common is a professional interest in the warranty process, from the assembly line to the consumer's home. Consumers are not a major part of the readership, although fleet managers in the airline, trucking, and metropolitan transportation fields are.

Success stories are welcome, but failures can teach others valuable lessons, too. Don't overlook the negative side-effects of warranty process automation -- unemployment, cost overruns, obsolete equipment caused by changes in the market -- but try to find the positive lessons for managers faced with similar situations.

Manuscript Requirements

Copy must be submitted in an electronic format. A plain text document in the body of an email message is best, but a Word document is also acceptable. The problem is that Word is quite hostile to HTML reformatting, in spite of the built-in converter. However, if photos or diagrams are part of the presentation, then a Word version can serve as a handy guide during the reformatting. Authors are strongly encouraged to add hyperlinks to their copy, in lieu of footnotes, sidebars, or extensive background explanations. Let's make use of the medium, and link as much as we can. However, keep in mind that the copy will end up incorporated into a pre-existing Web page as a 500-pixel-wide column, so advanced HTML formatting (style sheets, frames, JavaScript, etc.) is not advisable. It may interfere with the rest of the page (this is the biggest problem with the built-in Word-to-HTML reformatter: it assumes it is the page, not an insert into an existing page).

Charts and tables are strongly encouraged, but direct conversions from Excel to HTML are also troublesome, especially if there are multiple tables to be converted. It's the same problem: Excel reformats charts in a way that interferes with existing formatting of the rest of the page. Charts and graphics delivered in a JPEG, GIF, Bitmap, or PowerPoint format are best, but tables built in Excel can also be manually converted into HTML, as long as they're not overly complex. Please place all photos, graphics, charts, and diagrams in a separate folder. Line width should be 65-70 characters, left-justified. No handwritten manuscripts, please.

Manuscript length is determined by the value of your words. Don't pad out a story with more words than are necessary to make your point, but don't cut out important concepts or ideas to make space. Let us decide what to cut, if that becomes necessary, to fit our available space. Also keep in mind that extensive amounts of background material can be posted separately on second or third pages, with "see also" hyperlinks added to the body of the main piece. We encourage the inclusion of hotlinks to pre-existing white papers, press releases, news articles, slide shows, and other supplemental materials, especially as contact options.

Please include a short biography of the author(s) at the end. It need not be long or detailed. Three or four sentences is just fine. The goal is to provide the reader with both a brief background about the author(s) and a way to contact them with questions or comments. And don't forget to include a headshot photo!

The three main categories of articles we seek are:

  • Concept/theory -- approximately 2,000-3,000 words
  • Applications -- approximately 700-1,500 words
  • Case studies -- approximately 1,500-2,000 words

Art Requirements

Photos, charts, graphs, drawings, and other artwork should be sent in an electronic file format, preferably in a JPEG, GIF, or Bitmap format. Headshots should be at least 140 x 210 pixels (w x h) in size, and in an approximately 2:3 aspect ratio. Logos, clip art, and other design elements can be any size or aspect ratio, although anything wider than 480 pixels may need to be reduced in size to fit the available column width. If there are extra-large graphics or diagrams, we'll put a smaller 480-pixel-wide hotlinked version of it into the newsletter with instructions to "click here to see full-size version." Please include a credit line for the source of a graphic if other than the author.

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All articles must be original and must not have been previously published elsewhere. Warranty Week will encourage others to hotlink to the online version of the newsletter, and we will provide a package of logos, graphics, and HTML code to help a Webmaster accomplish this. We also encourage the inclusion of hyperlinks directing readers to the authors' bio, business and personal Web sites, and contact information. We also will provide authors with at least one copy of the HTML email edition of the article, which they are then free to forward and rebroadcast in its entirety to others. But the copyright will remain with Warranty Week.