Kia's announcement of an Australian-first seven-year, unlimited kilometre warranty could benefit buyers of others brands as they try to match it.
One of Australia's fastest growing car brands, Korean company Kia, is about to upset its big name rivals by announcing a seven-year unlimited kilometre warranty, the longest in Australian automotive history.
Kia’s sister brand Hyundai was the first company to offer a five-year, 130,000km warranty in Australia 15 years ago -- in 1999 -- as a response to quality concerns over a bungled safety recall the year before.
Hyundai then increased its warranty coverage to five years and unlimited kilometres in 2006.
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French car maker Citroen then raised the bar in March this year, offering new-car buyers an unprecedented six-year, unlimited kilometre warranty.
Kia's new benchmark of a seven year, unlimited kilometre warranty will put the market leaders under increasing pressure given brands such as Toyota, Holden, Ford, Mazda, Nissan, Volkswagen, Subaru, Honda, Audi, BMW and Mercedes-Benz only offer three years coverage.
It means buyers of most mainstream brands will eventually be the winners as they try to raise their level of warranty coverage to either match or get closer to Kia's seven-year stretch. But none are yet to react.
The longer warranty period will likely boost the resale value of Kia cars at trade-in time because used-car buyers will get the balance of the new-car warranty.
Most new cars are sold after four years, according to industry figures. This means a typical secondhand Kia would give used car buyers three years of factory-backed protection against faults.
The Kia warranty is part of the company's ambitious sales push in Australia after a decade of weak results.
Kia is just outside the top 10 sellers but its sister brand Hyundai -- which sells, in effect, the same cars under the skin but with different body styles and different branding -- is in the top four.
It is the largest gap between the two jointly owned companies in the world.
Kia recently poached Hyundai Australia's sales and marketing boss Damien Meredith to head the Kia division locally and this is his first step towards doubling sales within four years.
"This is a watershed moment," said Mr Meredith. "Kia customers now have a peace of mind that can't be matched in the Australian new car market."
The deal includes free roadside assistance for seven years -- if the car is serviced at a Kia dealer once a year.
Kia has also extended its capped price servicing program to seven years -- one of the longest in the car business -- and that prices of routine maintenance will remain the same as before.
"The two year increase in warranty, capped-price servicing and roadside assist is absolutely transparent and we will not be asking our customers to dip into their pockets to fund the extra benefits," said Mr Meredith.