Kia has introduced a seven-year warranty on its new Cee'd range. Will their salvo be matched? Daniel Attwood reports
Kia, the Korean car manufacturer that is enjoying a significant growth in sales on the Irish market, has fired the first salvo in a new warranty war after it confirmed that its new Cee'd range of cars will come with a seven-year 150,000km warranty. The deal covers the entire car for five years and the powertrain - engine, gearbox etc - for a further two years.
No other new car on sale in Europe is available with such an extended period of warranty as standard from its manufacturer.
The move will be seen as an attempt by the Far Eastern carmaker to sway Irish buyers looking for a guarantee of reliability in the run up to the peak new car selling period that starts with the dawn of every New Year.
The seven-year warranty, which applies only to the Cee'd range of cars and no other models in the Kia line up, actually comprises five years' comprehensive bumper-to-bumper cover on any of the new cars built at Kia's new Slovakian production facility, plus an additional two years' cover for the car's powertrain (the engine and transmission).
The new five-door hatchback will cost under €20,000 when it goes on sale in December, which puts it up against stiff competition like Toyota's Corolla and Ford's Focus.
A Kia spokeswoman explained that the extended warranty was not just to attract new customers to the marque and especially the new Cee'd, but also to highlight the company's confidence in its new Slovakian plant: "The Cee'd is built in a new factory and we wanted to show off our confidence of the build quality," she said. "We have no doubt that some manufacturers will react to this and some may follow suit, but we are not trying to start an all-out war."
What will be seen as a bonus by many buyers is that the warranty is not only free, but is also transferable to subsequent owners, provided the car is maintained in accordance with its servicing schedule.
Despite the move by Kia, which now controls 2 per cent of the Irish new car market on the back of a 68 per cent growth in sales this year, the majority of Ireland's car distributors are refusing to extend the warranty cover offered on their new vehicles. As a result, new car buyers can generally only expect cover of between two and three years or 100,000km.
Many companies such as Mercedes-Benz, Ford and Opel still offer only two years of cover on all of their new cars, although Ford does offer an extended warranty as a cost option.
All eyes are now on Hyundai - Kia's sister company - which recently failed to introduce a five-year warranty in Ireland, despite it being offered in Britain.
Now, even following Hyundai's revealing of its competitor to the Cee'd - the even more bizarrely named Arnejs - at the Paris Motor Show last week, the company has confirmed it will not introduce its own seven-year warranty.
Hyundai's managing director, Sam Synnott, explains why his company will not be drawn into a warranty war. "We wouldn't need to make a move like Kia's because Hyundai has already invested heavily in quality," he says.
"Just look at the JD Power quality survey, which ranked Hyundai third just below Porsche and Lexus. This makes Hyundai the highest ranking in terms of quality of all the volume brands."
While many companies seem content to rest on their reputations - perceived or otherwise - for quality and reliability, it is the value-for-money marques such as Kia and Fiat, which seem intent on kick-starting a warranty war that could eventually force all manufacturers to extend their cover.
In late 2004, Fiat introduced a four-year warranty making it the first car maker in Ireland to introduce such a long warranty as standard on all its new cars.
Fiat explained that the extension to its warranty cover was "a vote of confidence" in the quality and reliability of its cars.
As with Kia's offer, Fiat also allows its warranty to be transferred to the next buyer should the owner sell the car before the warranty expires.
Now, with its seven-year warranty, Kia has raised the bar and it is down to the competition to react.
Should they fail to do so, Kia's prediction that it will control 3 per cent of the market by the end of next year could well prove to be correct.