'A race to the bottom': Why Kia refuses to extend its warranty to match the conditional 10 years offered by Mitsubishi, MG and Nissan in Australia

Kia will stick with its present warranty in Australia for the foreseeable future.

With three manufacturers – Mitsubishi, MG and most recently Nissan – introducing conditional, dealer-service-activated 10-year options on top of their existing standard five-year timeframes, the modern-era long-warranty standard setter reckons stretching from its long-running seven-year/unlimited-kilometre item isn’t actually what buyers want or need.

Kia Australia CEO Damien Meredith said times have changed and consumers seek other priorities when purchasing a new vehicle.

“I think on October the first, 2014, we got (Kia’s warranty) right at the time,” he told CarsGuide. “I think that bringing a seven-year warranty to market there, in that period of time, was the right thing to do.

“I'm not quite sure the cachet is as good now as what it was back 11 years ago.”

During the early years of the 2010s, Kia was still finding its feet, having only arrived in 1996, and needed a unique selling proposition at the retail level to stand out against longer-established rivals like Toyota, Nissan, Mitsubishi, Mazda, Ford, Holden and even compatriot Hyundai – which had a decade’s head-start.

Having finally moved away from solely offering a drive-away/no-more-to-pay strategy on bottom-of-the-market cheapies (remember the Optima of 2001?), to way-better-designed and engineered models with Australian-tuned suspension (then a novelty for a full-line importer with no locally-manufactured cars) like the 2011 UB Rio, 2013 YD Cerato, 2014 UM Sorento and 2015 QL Sportage, Meredith added that breaking away with an industry standard-setting warranty was the perfect way to grab buyers’ attention while providing tangible peace-of-mind for them.

“I think, like anything, timing is really, really important in decisions, and whether it be business or life. I think we got it right,” he said.

“It certainly helped with our success, and was also driven by some great models that came along in that 2015, 2016 and 2017 period.”

In contrast, since launching their respective 10-year offers, all three brands have actually seen sales decline year-on-year in Australia – to the tune of between 14 and 17.5 per cent.

“If you look at the results, with Mitsubishi, MG and Nissan… it really hasn't helped their volume or their sales,” Meredith said.

“I think its importance to us when we introduced it (in 2014) was fairly (major), but now it's number three or number four when it comes to buying our product from our customers.

“I think it's of great comfort that (Kia’s existing seven-year warranty) is there, and it's done a great job for us. But I don't think there's (pressure for us to go to) eight years, nine years or 10 years.

“I don't think that holds sway for the importance of the purchaser. And also, I think that when they do purchase a car, they're really, really comfortable with (Kia’s existing) seven- year/unlimited kilometre warranty.

“It still serves that purpose, and you don't get into a race to the bottom.”