Volkswagen offers six-year warranty to win back customers
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Volkswagen AG is trying to win back American customers after its diesel emission scandal with SUV warranties that it said will be the longest in the United States.
Ahead of the New York auto show, the world’s largest automaker said Tuesday it will offer a six-year, 72,000 mile warranty on its new 2018 Atlas and 2018 Tiguan sport utility vehicles that go on sale later this year.
“This warranty further addresses the needs of American buyers head-on,” said Volkswagen Group of American chief executive Hinrich Woebcken.
VW said most other major rivals offer a 36,000 mile, three-year warranty on similar SUVs. The longest warranty is now offered by Hyundai Motor Co (005380.KS) and its Kia Motors Corp (000270.KS) affiliate. That warranty extends 60,000 miles or five years. The powertrain warranty is 100,000 miles, but it only lasts five years or 60,000 miles if transferred.
The German automaker has been struggling to recover since it admitted in 2015 the company installed secret software that allowed vehicles to cheat emissions tests for six years.
The new VW warranty is twice as long as the current three-year 36,000-mile warranty on the Tiguan. The Atlas is a new model.
VW brand U.S. sales this year are up 10 percent this year, but fell 8 percent in 2016 to 323,000 vehicles after falling 5 percent in 2015. The automaker halted all U.S. diesel sales in late 2015.
AutoNation (AN.N) Inc chief executive Mike Jackson said that an extended warranty could help win customers.
“The American people are full of forgiveness. All you have to do is say you are sorry and give them a deal,” said Jackson, who heads the largest U.S. new car dealership chain. VW has “to give a price that reflects that you are asking for forgiveness.”
In March Volkswagen pleaded guilty as part of a settlement over the automaker’s diesel emissions scandal.
In total, VW has agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting U.S. vehicles.
Questions & Answers
Q.What is the primary reason Volkswagen is offering this extended warranty?
What is the primary reason Volkswagen is offering this extended warranty?
Volkswagen is trying to win back American customers following its diesel emission scandal. The company admitted in 2015 to installing secret software that allowed vehicles to cheat emissions tests for six years, damaging its reputation.
Q.Which specific vehicle models will receive this new warranty in the United States?
Which specific vehicle models will receive this new warranty in the United States?
The new six-year, 72,000-mile warranty will be offered on Volkswagen's new 2018 Atlas and 2018 Tiguan sport utility vehicles. These models are expected to go on sale later this year.
Q.How does Volkswagen's new warranty compare to what its main rivals offer for similar SUVs?
How does Volkswagen's new warranty compare to what its main rivals offer for similar SUVs?
Volkswagen's new warranty is six years or 72,000 miles, which is twice as long as most major rivals' typical three-year, 36,000-mile offerings. Hyundai and Kia offer a longer standard warranty, but the details differ.
Q.Has Volkswagen's brand experienced a recovery in U.S. Sales recently?
Has Volkswagen's brand experienced a recovery in U.S. Sales recently?
VW brand U.S. Sales are up 10 percent this year. However, sales fell by 8 percent in 2016 and 5 percent in 2015, following the emissions scandal. They halted all U.S. Diesel sales in late 2015.
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