Archived Copies of Warranty Week

December 2002 to Today

Worldwide Heavy Equipment Warranty Report: Though the warranty expenses of the manufacturers rise and fall with the ebb and flow of construction and mining activity, many of the warranty managers have done a good job keeping expensed proportional to sales. Still, there are a few surprises in the worldwide data we've compiled.
October 1, 2020
American Auto Warranty Expenses: In this first part of a worldwide automotive warranty report, we find last year's slowdown turning into this year's slump. But the warranty expenses of the top U.S.-based automakers were actually up last year, and have failed to fall as fast as sales did this year, leading to increased expense rates.
August 20, 2020
First Quarter Homebuilder Warranty Report: Those who expected a free-fall because of the lockdowns are likely to be pleasantly surprised how non-dire the data looks so far in early 2020. Then again, reports from the second quarter, which ends next week, are expected to show more extensive damage, in spite of all the partial reopenings.
June 25, 2020
The Biggest 9-Month Warranty Expense Rate Changes: While we can't directly compare one company's warranty expense rates to another's, we can compare each company's current metrics against their year-ago levels. And then we can compare the size of the changes, to reveal which companies are seeing costs fall and which are seeing them soar.
January 16, 2020
Worldwide Aviation Warranty Expense Report: Warranty accruals were up last year, but warranty claims continued to fall. It's still too early for the cost of grounding of the 737 Max to show up in the data, but why are Boeing's warranty costs always much larger than Airbus? Meanwhile, Bombardier and Dassault saw significant spikes in their warranty expenses last year, while Gulfstream and Embraer saw slight declines.
October 10, 2019
Aerospace Warranty Report: Claims and accruals continue to fall for the top aerospace OEMs, though the warranty expense rates of aerospace suppliers has been rising for two years now. And the recent acquisition of Rockwell Collins by United Technologies has made the industry's largest warranty provider even bigger.
March 28, 2019
Warranty Claims & Accrual Rates: Among the seven largest warranty-providing industries, only a few have a consistent history of reducing warranty expense rates. Instead, most have seen their claims and accrual rates both rise and fall over the past 15 years, and a few have even seen sustained increases in their warranty costs.
March 29, 2018
Power Generation & Material Handling Equipment Warranty Report: While the overall totals and averages don't change by much from year to year, some of the individual companies in these industries are seeing their warranty expenses rise and fall dramatically.
June 2, 2016
New Home & Building Materials Warranty Report: The name of the game is stability. Some of the builders and their suppliers have gotten very good at accurately predicting their future warranty costs and keeping them stable. Others let them rise and fall without much of a thought about warranty management. And it's easy to see the difference relatively quickly in a chart.
May 26, 2016
Extended Warranty Conferences: As the old saying goes, two's company, but three's a crowd. With the Warranty Chain Management Conference a fixture in the spring, two conferences are competing to become the industry's preferred event in the early fall. This year, they were three weeks apart, but next year, there's only three days between them.
October 16, 2014
Material Handling Equipment Warranties: Most of the companies that manufacture equipment to handle, move and store materials have kept their warranty expense rates below one percent. But a few have expense rates far above that level, and some have expense rates that rise and fall dramatically.
July 31, 2014
Vehicle Service Contract Conference: This year, it will be possible for an attendee at the WCM Conference to hone in on some high-level discussions about issues affecting the vehicle service contract industry. They used to do that in the fall at a show in Vegas, but that event has gone in a different direction.
February 13, 2014
Handheld Warranty Costs: While RIM's costs rise, Apple's costs fall. And while other smartphone makers have reported high warranty costs, Nokia's are only half as high. Is there something about being small and smart that drives up warranty costs?
June 14, 2012
New Home & RV Warranties: When sales were falling, builders cut their warranty accruals. But, worried by claims payments that didn't fall as fast, they didn't cut accruals enough. So now some have built up excess levels of warranty reserves that may be in the multiple millions of dollars for at least 10 homebuilders.
January 5, 2012
New Home Warranty Report: New home sales continue to fall and so do warranty costs. As homebuilders wonder if this is the bottom of the economic cycle, we wonder whether they may be keeping more warranty reserves on hand than they need.
September 8, 2011
Appliance & HVAC System
Warranty Report: Every journey includes a few bumps, and both appliance and HVAC makers have hit a few in the past couple of years. But like other building material suppliers, they're doing much better than the homebuilders, because they have both home renovations and replacements to fall back on.
June 2, 2011
Fixtures, Furniture & Building
Material Warranty Report: Sales have fallen but warranty costs aren't falling as fast. Still, it's not as bad as things in the new home industry, because suppliers can fall back on existing home renovations.
May 26, 2011
Warranty Accruals per Vehicle: Multiple readers said something wasn't quite right with the warranty data in last week's newsletter. So this week we're diving into the deep end, probing to see if it's possible for both accruals and prices to fall as fast as the math says they are.
July 15, 2010
Warranty Claims & Accruals
by Industry: There's been a massive divergence between claims and accrual rates, and it can't all be blamed on the recession. It looks more like some companies are managing earnings by reducing their accrual rates to make their numbers. As claims rates soar, accruals fall.
April 15, 2010
Aerospace Industry Warranties: In an industry that puts a premium on safety and reliability, warranty costs rarely stray far from the baseline. And while many aviation companies cope with the double whammy of rising warranty costs and declining sales, some such as Boeing and Gulfstream are actually seeing sales rise and claims fall.
October 1, 2009
Annual Warranty Totals & Averages: While claims were up slightly in 2008, both warranty reserves and accruals actually plunged last year. And as sales fall, the percentage of product revenue spent on claims has risen. With no less than 21 charts, we detail the industry totals and averages for the past six years.
May 7, 2009
Computer Warranty Trends: While other industries are seeing claim rates rise and accrual rates fall, warranty providers in the computer industry are seeing claims rise slightly and accruals rise a lot. And it's not so easy to blame those changes on sales declines, or to link them with quality increases.
March 26, 2009
Warranty Cost Cutting: Among the top 100 warranty providers, more than half have reduced the percentage of sales they allocate to warranty costs in the past year. Some have cut their accrual rates by a third, a half, or even more. And many have also seen their claims rates fall, suggesting not only cost cutting but also quality improvements.
November 20, 2008
Telecom Equipment Warranties: Claims are up slightly and accruals are down slightly, as are total warranty reserves. But within the telecom sector are a handful of companies that have seen warranty costs fall significantly in the past five years.
October 9, 2008
Furniture & Appliance Warranties: At the half-year mark, warranty costs are creeping up as sales slowly decline for some well-known brands. But others have seen sales rise and warranty costs fall.
September 25, 2008
The Institute of Warranty Chain Management: Membership opens this spring and certification courses begin in the fall. Yet some people still wonder why it's taking so long. The reason is a perceived need by the board to develop content and services to retain members before recruiting them.
March 19, 2008
Automotive Warranty: The Big Three feel the bite of increased warranty costs in the first quarter just as sales begin to fall. But how can companies be compared over time if their accounting standards and even their currencies are different?
May 24, 2005
Top 50 Warranty Providers: Manufacturers spent more than $25 billion last year on warranty claims, but sales rose a bit faster, so claims as a percentage of revenue fell slightly. Most of the top 50, however, saw their claims rates fall more.
May 3, 2005
The Warranty Cushion: Very large companies put aside proportionally more to pay warranty claims than either mid-sized or small companies, while very small companies allow their reserve fund ratios to rise and fall. The difference between them is their skill at the arts of warranty estimation and accruals.
June 8, 2004