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Hyundai is studying an unprecedented eight-year warranty in an effort to arrest a sales slide in Australia’s softening new-car market.
The Korean giant – currently the country’s third best-selling manufacturer – was one of the first to move to a five-year, unlimited-kilometre warranty, a move seen by many as a masterstroke in claiming its current market share.
But the market has largely caught up, with every manufacturer in the top 10 now offering a five-year term, and some – namely fellow Korean brand Kia – offering a full seven years of coverage.
Challenger brands have also shifted to a seven-year term, with MG, Haval and SsangYong all offering a full 84-month warranty.
But Hyundai is planning to once again trump the field, with a study currently underway to launch an “eye-opening” coverage term, thought to be at least eight years.
“Honestly, we are studying how we can take a leadership position again in those areas,” Hyundai Australia’s CEO, JW Lee, told CarsGuide.
“For example, Kia is offering a seven-year warranty. And some of the other manufacturers have started doing that, too.
“So whether we go to a seven-year warranty, or something more, something eye-opening. But there are pros and cons, so we need to study some more what will be the best solution.”
Tesla currently offers an eight-year warranty on its vehicles, but doesn't move product in anywhere near the numbers that Hyundai does.
The study comes as Hyundai – and the industry more broadly – struggles to deal with a softening of the new-car market, with Australian sales down 8.1 per cent year-to-date in 2019. Hyundai’s sales are down 11.6 per cent so far this year.
Hyundai says it also will rely on new models that pioneer both eco-friendly and performance-focused attributes to reshape its brand image, allowing it to protect its pricing structure rather than chasing volume.
“I don’t think the market will recover in a short period of time. So we’re going to reinforce our basic things- our brands, our quality. Hyundai is famous for chasing volume, volume, volume, but I think in one or two years, the market will still be soft,” JW Lee says.
“So instead of sacrificing our profitability, we’ll focus more on quality sales. Like our eco-friendly models, like Ioniq or Kona Electric, which are going to change our image.
“Our performance cars are helpful in changing our brand perception to customers. Then there’s mobility services, connected services, as we try to transform our brand image from past to future.”
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