Volkswagen offers six-year warranty to win back U.S. customers
Volkswagen AG (VOWG_p.DE) is trying to win back American customers after its diesel emission scandal with SUV warranties that it said will be the longest in the United States.
Ahead of the New York auto show, the world’s largest automaker said Tuesday it will offer a six-year, 72,000 mile warranty on its new 2018 Atlas and 2018 Tiguan sport utility vehicles that go on sale later this year.
“This warranty further addresses the needs of American buyers head-on,” said Volkswagen Group of American chief executive Hinrich Woebcken.
VW said most other major rivals offer a 36,000 mile, three-year warranty on similar SUVs. The longest warranty is now offered by Hyundai Motor Co (005380.KS) and its Kia Motors Corp (000270.KS) affiliate. That warranty extends 60,000 miles or five years. The powertrain warranty is 100,000 miles, but it only lasts five years or 60,000 miles if transferred.
The German automaker has been struggling to recover since it admitted in 2015 the company installed secret software that allowed vehicles to cheat emissions tests for six years.
The new VW warranty is twice as long as the current three-year 36,000-mile warranty on the Tiguan. The Atlas is a new model.
VW brand U.S. sales this year are up 10 percent this year, but fell 8 percent in 2016 to 323,000 vehicles after falling 5 percent in 2015. The automaker halted all U.S. diesel sales in late 2015.
AutoNation (AN.N) Inc chief executive Mike Jackson said that an extended warranty could help win customers
“The American people are full of forgiveness. All you have to do is say you are sorry and give them a deal,” said Jackson, who heads the largest U.S. new car dealership chain. VW has “to give a price that reflects that you are asking for forgiveness.”
In March Volkswagen pleaded guilty as part of a settlement over the automaker’s diesel emissions scandal.
In total, VW has agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting U.S. vehicles.