Holden won’t extend temporary seven-year warranty offer

Holden isn’t planning to extend its current promotional seven year /175,000km warranty beyond the scheduled December 31 end date.

From January 1, 2018, the company will once again offer only three years/100,000km of free cover for buyers, leaving them to negotiate the cost of an extended warranty if they want more.

The Lion brand has been running the extended warranty campaign on all models, to help its brand marketing following the factory closure last month.

The term matches Kia’s as the longest in the industry, though the Korean brand has no kilometre ceiling.

Holden chairman and managing director, Mark Bernhard, told CarAdvice the campaign had coincided with an uplift in sales, and gave it a point of different.

But that doesn’t mean the company is prepared to fund the deal on a permanent basis. Yet.

“At the moment the program ends on December 31,” he said.

Surely it’s not a good look, essentially telling people that they’ll get a greatly inferior warranty if they buy next year?

“The industry runs programs all the time… sometimes they are [around] servicing, sometimes they’re warranty, sometimes they’re just lower prices,” Bernhard countered

“There’s a host of different programs, this is just another one, which we think resonates with customers, particularly at a point when we closed the plant.

“… It’s a combination of incentive and brand building. Cerainly it helps us stand out a little bit more but at the end of the day it’s a retail exercise to help us sell more cars,” he added.

It was then put to him that a seven-year warranty had done wonders for Kia, which has seen sales improvements of around 30 per cent this year.

“Is that the only thing that’s selling Kias? They’ve got a better portfolio of product and dealer network now…”

The move to extend the new-car warranty period came after Holden was investigated by the ACCC for breaches of the Australian Consumer Law (ACL).

Holden is certainly committing to  a future beyond manufacturing, with announcements this week of $7 million into its Lang Lang proving ground and a co-funding agreement that’ll total up to $200 million, into its 200 dealerships.

MORE: Five-year warranties should be standard