In 2019, Warranty Week reported that warranty claims expenditure for automotive manufacturers amounted to about 2.5% of their revenues. Controlling these automotive warranty costs provides auto makers a significant opportunity to increase their profitability.
Many automotive manufacturers are realizing that reducing the vehicle complexity plays a vital role in controlling warranty costs while improving quality and cost savings. Also, choosing the right technology for warranty claim management and handling can play a significant role in controlling warranty costs.
For instance, certain manufacturers are looking to augmented reality (AR) for management of their warranty parts and claims clearing processes. Here is how leveraging technology can help automotive companies reduce unnecessary warranty expenditure:
Helps Improve First-Time Fix Rates
Combining technical information from various manufacturers’ IT systems such as viz. repair instructions, diagnostic systems, electrical diagrams, and technical level bulletins provides dealer technicians with step-by-step instructions to assist them in performing the right repairs the first time.
The ability to embed short videos and/or visuals in the instructions helps improve the clarity of instructions as well as repair efficiency. Thus, using digital solutions to present technical information in a convenient and easy-to-use, accessible format not only encourages its adoption among the technicians, but also helps improve the fix time.
Helps Reduce Inaccurate Claims
Improving first-time fix rates reduces incorrectly diagnosed problems and inappropriate repairs. The biggest reason for a clam to be inaccurate is because the repair fails to adequately address the cause of the problem.
Through digital streamlining of the workflow process, data automatically captured during the repair can provide information about the nature of the warranty defect and the environment in which it occurred. This enables verification of nature of warranty problem and the fix applied, while providing scope for quality improvement.
Helps Provide Data To Supplier for Quality Improvement
With advanced digital solutions such as augmented reality, it becomes easy to capture the repair process for analysis and knowledge transfer. Data automatically captured during the guided repairs can be extracted and sent to parts or components suppliers for them to understand the nature of the defects. This detailed data about the nature of the component failure enables suppliers to improve quality of future products, thus further lowering warranty costs.
Helps support corporate environmental goals
Digital parts checks can eliminate the need to ship parts subject to warranty claims around the country 9or even globe). Eliminating such unnecessary transportation costs and paper based processes can have a direct and meaningful impact on the automaker's carbon footprint.
Helps Improve Customer Satisfaction
Resolving the cause of the customer’s concern at the first repair attempt naturally helps improve customer satisfaction. Additionally, repairing the vehicle efficiently and faster due to guided step-by-step instructions enables customers to get back their cars sooner than expected and further improves customer satisfaction, as demonstrated in the JD Power CSI surveys.
Porsche Cars North America, has shortened their service resolution time by up to 40% by using Atheer’s Front Line Worker Productivity Platform. You can read about it here.
Atheer’s end to end Front Line Worker Platform efficiently helps streamline the warranty approval and management processes for firms, thereby helping them save on warranty costs and achieve improved customer experience. Please refer to this case study to know how Atheer helped Volkswagen Group provide real-time support to make their operations and aftersales services seamless and systematic.