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Hyundai breaks new ground with Triple Care

As the 10th anniversary of its five-year warranty beckons, it looks like Hyundai has raised the stakes again with the introduction of its enhanced product Triple Care across the range.

Hyundai seems to have its finger on its customers’ pulse despite the efforts of rivals such as Kia with its seven-year warranty, Toyota’s five-year warranty and Vauxhall’s ‘Lifetime’ warranty, the latter which Hyundai managing director Tony Whitehorn refers to simply as ‘interesting’.

With limitations of 100,000 miles on all these, Hyundai’s unlimited five-year warranty would win hands down for most motorists anyway, but Triple Care extends the offering.

Billed as another ‘world-beater’ by Hyundai, Triple Care provides motorists with roadside assistance and vehicle health checks as well as the warranty for five years.

Whitehorn believes it taps into the psyche of today’s car buyer who isn’t simply looking for an ever longer warranty.

He said: “People are much more interested in what value they will receive during the period of ownership.

"Our research has shown that the majority of people keep their new car for four to five years; anything beyond a five-year warranty then is of no incremental benefit.

"That’s why we need to deliver more value in the period of ownership.”

Triple Care was first introduced in 2010 on the i30 and i35 with the ix20 and i10 following shortly after, but all Hyundai vehicles registered from July 1 will now be covered by the product.

He added: “When we introduced the five-year warranty it was to entice people to the brand; the cars were cheap so people questioned their quality. It was almost a necessity.”

According to Whitehorn the marketplace has moved on again and with it, he argues, so has Hyundai: “We are saying to customers that not only are we prepared to look after your car for five years, but we will also take care of breakdowns and provide complimentary health checks.

"We are constantly driving to add value as we know that’s what people want.”

The Hyundai dealers AM spoke to were very much in agreement with Whitehorn, believing the brand’s warranty to be the best in the business and that the manufacturer is moving the product on in a way that appeals to customers.

In fact, both Jim Adkins, sales manager at Platts Hyundai in High Wycombe, and Steve Kennedy, franchise manager at SG Petch in Darlington, described the five-year warranty as ‘bullet-proof’.

“From a sales point of view, a five-year warranty is perfect,” said Adkins. “It’s about the time our customers will look to change their vehicle.

"The obvious way to go would have been for Hyundai to extend its warranty even further, but then you run the risk of people putting off their next buying decision.

"Increasing the warranty period would inevitably bring additional warranty work as the cars age thereby diluting the product, and additional conditions would have a negative effect.

"Instead Hyundai has moved forward by creating a new package while maintaining the established buying cycle.”

Kennedy remembers the product’s launch.

He said: “It made a huge difference to us at the time. It took away a lot of the uncertainty surrounding Hyundai itself and instilled customers with a new confidence that these cars were reliable. It gave the brand credibility and the warranty’s comprehensiveness was something we had never seen before.

"It was groundbreaking at the time and still is now.”

Dealers and Whitehorn do not report increased workshop hours spent on warranty work as the vehicles age. In fact, Whitehorn says just 14% of labour hours last year accounted for warranty work, which is not only particularly low, but compares favourably to other manufacturers.

“I know of manufacturers who run at 27-30%,” he said.

Nor is the Hyundai warranty stacked with exclusions making it practically impossible for a customer to make a claim, and that’s backed up by dealers’ own experiences.

At SG Petch, Kennedy recalls a Terracan customer who had bought the 100,000-plus mile vehicle privately although it had been fully serviced within the network.

Kennedy said: “The engine had gone and the five-year warranty had literally just expired; the driver came to us for a repair price.

"We made a call to Hyundai and it still honoured the warranty. The customer couldn’t believe it and neither could we.”

At Platts, which has represented the brand since 1997, Adkins has his own extraordinary warranty story: “We had one customer whose Santa Fe had clocked up 220,000 miles, but was still under warranty when the engine went; Hyundai replaced it under the cover without question.

"You can’t quibble with service like that and that’s what people want to see.”

It doesn’t seem to matter if a dealer is new or not to the Hyundai brand; opinions are similar.

“Hyundai offers the best warranty product in the industry at the moment,” said Steve Parker, sales manager at Lookers Hyundai in Preston which came to the franchise just a year ago.

“People are now even more cautious about spending money and value-for-money really counts.

"People are buying into a much bigger package when they purchase a new Hyundai and the new five-year Triple Care will once again help the brand stand out from the competition.”

So what of the independents, then?

Surely with Hyundai enhancing its aftercare package in a bid to keep its customers loyal and captive in the network as well as other manufacturers following suit, it stands to reason that independents could be forced to reinvent their products and offer something far more superior.

Whitehorn, however, doesn’t believe the independents and the manufacturer are even competing for the same custom.

As far as independent warranty provider WMS Group is concerned the current frantic manufacturer warranty development is good news for it.

Business development director Eric Stone said: “All this activity is positive for us.

"Anything that promotes warranty and stimulates thoughts about warranty products is a good thing and generally has an excellent knock-on effect for independent sales.

“Not every dealer has a longer warranty and many franchised dealers sell non-franchised cars yet customers still have certain expectations, which include a warranty.

"That’s where we come in.”

Stone is not unduly worried by the number of longer new car warranties or enhanced packages.

The independents are often the suppliers for the manufacturer approved schemes anyway, he pointed out, and it is not uncommon for the manufacturer warranty to be more expensive than the exact same product purchased direct from the independent.

In the race to keep customers in the network, Stone does believe some manufacturers could consider longer warranties, but like the Vauxhall ‘Lifetime’ warranty with its 100,000 mile ceiling and stipulation that it is valid only if the car stays with the original owner, these will probably have to come with a myriad of conditions.

He said: “It could well be that some manufacturers will extend their warranties from anywhere between three and seven years although I think 10 years will have to be the limit.

"If that happens then independent warranty companies will have to think outside the box and come up with additional products to maintain revenue."

But Hyundai’s dealers seem to be in Whitehorn’s camp that a longer warranty with its inevitable complicated terms and conditions or mileage limitations simply won’t cut it with today’s car buyer.

Steve Judd, aftersales manager at Tates Hyundai in Brighton, said: “Even though we have other makes competing with Hyundai on the warranty front, I don’t think Hyundai should look to extend further.”

As other manufacturers continue to find new ways of generating the loyalty of the new car buyer, Hyundai may find itself having to blaze a new trail to maintain its innovative direction which it established in 2002 when the five-year warranty was born.

For the moment, however, Hyundai and the dealers we spoke to believe the new Triple Care ticks that box.

Although it is clear that dealers’ expectations of Hyundai are high and they are keen for the brand to do everything it can to stay one step ahead.

Judd said: “Now Hyundai needs to go back to the same concept that saw the creation of the five-year warranty 10 years ago.

"A service package should be incorporated as part of the entire deal. In this way you are returning to the spirit which helped formulate the five-year warranty – attracting the buyer to Hyundai and then keeping them loyal to the dealer network.”

Perhaps for Whitehorn, then, the way is clear and the brand will need to do nothing more than implement the ideas of some of its forward-thinking dealers like Judd who would like to see another bold move from Hyundai such as incorporating the cost of servicing in the on-the-road price of its cars.

All eyes will be on Hyundai next year as the industry watches to see if it will celebrate its warranty’s 10th birthday in such a decisive way.

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