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Chrysler to end 7-year, 70,000-mile engine warranty

Mon May 16, 2005 04:34 PM ET

DETROIT, May 16 (Reuters) - The Chrysler side of DaimlerChrysler AG (DCX.N: Quote, Profile, Research) (DCXGn.DE: Quote, Profile, Research) will end its warranty of 7-years or 70,000 miles on its engines and transmissions, more than three years after it initiated the offer, a spokesman said on Monday.
Beginning with 2006 model year vehicles, arriving on the market in coming months, the powertrain on Chrysler, Dodge and Jeep vehicles will be covered by the 3-year or 36,000 mile warranty, as are all other parts.

Customers did not place much value on the extended warranty for the engine and transmission, so the company decided to use funds backing the offer and promoting it elsewhere, spokesman Kevin McCormick said.

"We felt like if customers are not seeing that as a value added we felt we could direct that into others areas of the company like product development," he said.

Chrysler first began offering a 7-year or 100,000 mile warranty on the powertrain in November, 2001 in order to reassure consumers about its quality and tout the benefits of the 1998 merger between Chrysler Corp. and Daimler-Benz AG.

Initially, Chrysler said it would offer the extended warranty for a limited time, as it competed with interest-free loans offered by General Motors Corp. (GM.N: Quote, Profile, Research) and other automakers. But in July, 2002, Chrysler made a 7-year or 70,000 mile mile warranty permanent on the powertrain.

Several Asian automakers, such as Hyundai Motor Co. Ltd. (005380.KS: Quote, Profile, Research) , Kia Motors Corp. (000270.KS: Quote, Profile, Research) and Isuzu Motors Ltd. (7202.T: Quote, Profile, Research) offer longer warranties in a bid to boost their image and convince consumers about their quality.

The Chrysler, Dodge and Jeep brands all recorded improved scores, but still ranked below the industry average, in last year's benchmark study of customer-reported problems during the first 90 days of ownership by J.D. Power and Associates.


© Reuters 2005. All Rights Reserved.

Story Link: http://yahoo.reuters.com/financeQuo...tfh83511_2005-05-16_20-34-16_n16454540_newsml
 
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