February 11, 2021
Warranty claim campaigns are an extremely costly burden on OEMs. It’s estimated that automakers spent around $49 billion on warranty expenses in 2019, equaling about 2.5% of overall revenue. OEMs can easily decrease warranty costs through early problem detection, root cause analysis, and quicker containment and corrective action. Enabling all of this, is connected vehicle data.
Connected vehicle data has the potential to provide OEMs with insight into vehicle health before the vehicle even leaves assembly yards or dealerships. The majority of warranty claims for vehicles occur during the first year of vehicle ownership and a surprising number happen within the first few months of service. We have found that over three quarters of these early problems experienced by customers are easily detected through robust vehicle data logging.
Driving down warranty costs is simple: detect and contain problems early in the product life cycle. It can take a long time for an OEM to detect a systemic problem from a quality issue, and from there properly find the root cause, contain and begin the course of permanent corrective action. A good example of problematic warranty claims is having to do with dead batteries. Instances of dead batteries needing replacement in new vehicles has been an achilles heel for OEMs, and the problem seems to be getting worse as the number of electronic systems continue to increase and become more complex. The issue is generally not the battery but a system issue relating to one or more ECUs. Often battery related failures occur very early in the vehicle’s lifecycle, forcing customers to bring almost brand new vehicles back into the dealership. The Sibros Deep Logger platform enables OEMs to easily find the root cause of these kinds of tough to find issues by constantly monitoring the vehicle’s overall system interactions. Once the root cause is understood then permanent corrective action is taken to eliminate occurrences on other vehicles.
It is interesting to see how much warranty expense is incurred by the OEM even before the vehicle is sold. OEMs generally perform a pre-delivery inspection on vehicles before the vehicle is delivered to the customer. Most of the problems detected by these inspections could have been contained by the OEM at the assembly yard through an improved data logging solution. Additionally, vehicles at the dealership are often driven through test drives; access to vehicles at that point can point to an issue and give OEMs an opportunity to correct it before customer delivery. Having access to this information can lead to a superior customer experience by taking care of the problem before the customer takes possession of the vehicle.
Some examples of issues that can be resolved before or at the dealership are faulty O2 sensor performance and AC system leaks. Data logging can and should go beyond the Diagnostic Trouble Codes (DTC) that illuminate the warning lights in the vehicle. Rather, it needs to capture the system interactions and detect problems before the customer is really impacted. If the data is there, it should be captured to address the problem before the customer has to bring the vehicle in for a warranty claim. From there, the data needs to be fed back to the OEM to be analyzed and understand the root cause of the problem, and apply a containment solution.
With connected vehicle data, OEMs have the opportunity to change their strategy around quality management. Relying on warranty claim data filed by customers just takes too long. On average, there is close to a 100 day lag when using the traditional warranty systems to detect the emergence of a systemic problem. If an OEM is waiting for the customer to come back to the dealership to report an issue, it could spend months building vehicles with the same problem.
The long term roadmap to decreased warranty claims is not that out of reach. Connected vehicle data is more accessible than ever before with solutions like the Sibros Deep Connectivity Platform. With comprehensive OTA Update and Logging capabilities, OEMs can act faster to remedy problems that would otherwise show up as warranty claims, and gather back data from those same problems to avoid similar ones in the future. With smart data logging, OEMs can have a complete view of vehicle health, while only logging the data they need.
To learn more about the Sibros Deep Connectivity Platform, contact us or schedule a demo.