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

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.

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.

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.