Photo: Volkswagen
Back in April 2017, Volkswagen made a bold move in the United States by introducing a six-year or 72,000-mile transferrable warranty with bumper-to-bumper coverage. Fast-forward to the present day, and the German group decided to throttle back to four years and 50,000 miles for financial-driven reasons.
Automotive News reports that the change would come for the 2020 model year “to help profit-struggling dealers” and to start a “Tier 3 advertising program that will pay dealers up to $200 per vehicle.” Scheduled to begin in the first quarter of 2020, the program doesn’t sound good.
While it may be profitable for the dealerships and Volkswagen, customers will take the hit when something goes wrong after four years of ownership. To sweeten the deal, Volkswagen has also decided to throw in two years of factory-covered maintenance. The thing is, this type of compromise still is a compromise at the end of the day for the U.S. customer.
"We felt that a combination of a strong warranty with a service and maintenance package and the co-op program for our dealers, which is where we netted out, was the best way forward," commented Duncan Movassaghi, senior vice president of sales and marketing. The switch comes as a result of an internal evaluation, showing that Volkswagen thinks about itself and the dealerships more than the people with money in their pockets.
Following the Dieselgate scandal and a few other high-visibility difficulties, does it come as a surprise the higher-ups in Wolfsburg are as greedy as ever? Adding insult to injury, Movassaghi explains that "more than half our Atlas customers became aware of the six-year warranty in the dealership."
That’s a marketing problem first and foremost, something that Volkswagen has to sort out on its own. As if that wasn’t enough of a mess-up, the Tier 3 program is designed to be “relatively flexible, to allow dealers to develop their local markets.” Read that line again, then remember how greedy are Volkswagen dealerships in this part of the world.
The bottom line is, the six-year warranty costs Volkswagen too much given the automaker’s poor reliability record while the four-year warranty is nothing more than a cost-cutting measure. Can we get a round of applause for Wolfsburg? Thank you!
While it may be profitable for the dealerships and Volkswagen, customers will take the hit when something goes wrong after four years of ownership. To sweeten the deal, Volkswagen has also decided to throw in two years of factory-covered maintenance. The thing is, this type of compromise still is a compromise at the end of the day for the U.S. customer.
"We felt that a combination of a strong warranty with a service and maintenance package and the co-op program for our dealers, which is where we netted out, was the best way forward," commented Duncan Movassaghi, senior vice president of sales and marketing. The switch comes as a result of an internal evaluation, showing that Volkswagen thinks about itself and the dealerships more than the people with money in their pockets.
Following the Dieselgate scandal and a few other high-visibility difficulties, does it come as a surprise the higher-ups in Wolfsburg are as greedy as ever? Adding insult to injury, Movassaghi explains that "more than half our Atlas customers became aware of the six-year warranty in the dealership."
That’s a marketing problem first and foremost, something that Volkswagen has to sort out on its own. As if that wasn’t enough of a mess-up, the Tier 3 program is designed to be “relatively flexible, to allow dealers to develop their local markets.” Read that line again, then remember how greedy are Volkswagen dealerships in this part of the world.
The bottom line is, the six-year warranty costs Volkswagen too much given the automaker’s poor reliability record while the four-year warranty is nothing more than a cost-cutting measure. Can we get a round of applause for Wolfsburg? Thank you!
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