Why Mercedes-Benz moved to a five-year warranty

Mercedes-Benz was the first premium German carmaker to serve up a five-year/unlimited kilometre warranty earlier this month, but as the market-leading luxury brand, did it need to?

Last month, Mercedes-Benz Australia finished as the 10th most-popular car brand with 2673 sales, with Holden slipping out of contention after parent company General Motors announced it was retiring the Lion brand.

This has not been the first time Benz has cracked the top 10 either, with the premium brand beating out the likes of Jeep, Honda and Kia in monthly sales in the past on the back of strong interest for the C-Class mid-sizer.

However, with nearly mainstream brands – including Toyota, Mazda, Hyundai, Ford and Nissan – all moving to the five-year/unlimited kilometre warranty, did Mercedes-Benz feel the pressure to keep up with the new standard?

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Mercedes-Benz the first premium German brand to move to five-year warranty

Speaking to CarsGuide, Mercedes-Benz Australia PR boss Jerry Stamoulis was clear in stating that the increased warranty was not due to any external factors.

“This was part of our strategy, and I can’t go into too much detail, but it’s part of our strategy and there’s different reasons why, which we don’t discuss openly, but I wouldn’t call it pressure from the industry or even our customer base,” he said.

“But we know that customers are already appreciating it.”

Mr Stamoulis was also quick to point out that the new warranty was something the brand was working on in the background for some time, and that it is expected to increase customer satisfaction in Benz.

“It’s been something we’ve been discussing for a number of years,” he said. “It wasn’t an overnight decision; we’ve been quite open about that in the past.

“And it’s not just warranty, it is part of that strategy of improving customer experience. And this is just another element.”

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Will more premium carmakers move to a five-year warranty?

Finally, when queried as to whether the new warranty programme, coupled with the departure of Holden, paves the way for Mercedes-Benz to be a consistent top-10 contender, Mr Stamoulis said the brand has no such metric in place.

“Our number one priority is being the leaders in every segment that we play in, and if we finish top 20 or 10, it’s not a priority for us, there’s no KPI for us to finish in the top 10,” he said.

“It’s (where Mercedes will be by the end of the year) really difficult to tell, not only because of the industry, but what’s happening in the world.

“I think any sort of sales race predictions this year are almost out the window because there’s so much uncertainty with the economy that we couldn’t make any sort of predictions.”