Report: Warranty costs dropping for Detroit 3
 

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The Detroit News reports that warranty costs for U.S. automakers are down by 40 percent or more since 2007. Part of that decline comes from shrunken sales, but the biggest contributor to the growing trend is improved quality. Ford has seen its warranty costs drop by 40 percent since 2007, while General Motors is at 45 percent and Chrysler has seen a 48 percent decrease. Doug Betts, senior vice president in charge of quality for Chrysler, told DetNews that the Pentastar saw its warranty costs drop by $240 million in 2008 alone, and 2009 saw still more (unspecified) savings. Ford has saved an estimated $1 billion since 2007, and GM's costs have dropped from $917 million in the first quarter of 2009 to $821 million in Q1 of 2010.

Recent J.D. Powers data shows that quality has indeed improved for domestic automakers, but the biggest challenge for the Detroit 3 is to prove to customers that its products are competitive and even class-leading in terms of quality. While that may take many more years and lots more marketing dollars to accomplish, we're thinking Ford, GM and Chrysler are at least happy that the cost to build new cars and trucks will be a little bit cheaper this year.



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