GM Woos Consumers with Huge Warranty Package

General Motors has come out swinging in the automotive wars by incenting consumers with what is considered to be the largest warranty among automakers for its 2007 car and light-duty truck lineup.

The company is offering car buyers a 100,000-Mile/Five-Year Powertrain Warranty with no deductible on its 2007 cars. The Powertrain warranty is transferable (if the vehicle’s sold again) and covers parts related to the engine and transmission, potentially costly repairs for consumers.

The warranty applies to GM’s 2007 Chevrolet, Pontiac, Buick, GMC, Hummer, Saturn, Saab and Cadillac brands and is retroactive for consumers who have already purchased 2007 models. In addition, GM has expanded its roadside assistance and courtesy transportation programs to match the term of the Powertrain warranty.

“The new package is an important part of GM’s sales and marketing strategy, which is focusing consumers on the inherent value of its cars and trucks,” the automaker said.

Jesse Toprak, analyst at online automotive resource Edmunds.com, said GM needed to do something to sell the product and not the deal. “I think they hammered this down relatively well,” he said.

The automaker began to woo consumers with the current warranty offer by promoting it via a TV spot, which aired during NBC’s broadcast of the NFL season opener on Sept 7. The 60-second spot, themed Elevate, tells the story of how people who buy GM cars, pickups, SUVs and crossover vehicles now travel on a “higher road” with a new level of confidence, thanks to the warranty. The spot, created with GM by Deutsch, Inc., Los Angeles, features 2007 GM cars and trucks elevating above gridlocked traffic. Once airborne, surprised drivers accelerate on this exclusive, alternate freeway.

The automaker also developed a dedicated Web site, GM.com/warranty, which provides consumers with additional details about the program. Print ads and P-O-P materials support.

Meanwhile, GM’s rival Ford offers a 60,000 mile/5-year Powertrain warranty and Chrysler did away with its 70,000 mile/7-year powertrain warranty last year. Meanwhile, Hyundai, which started the warranty war beginning with its 1999 models, offers a 100,000-mile/10-year Powertrain warranty that is non-transferable.

These warranties “are important for brand building in the long term,” Toprak said. “These changes [by GM]…are not likely to produce short term results. The greatest impact will probably be on consumers who are doing research mainly online and comparing brands.”

Nevertheless, Toprak expects Ford and others to follow the lead set by GM.

Last year, Detroit-based GM took the lead in introducing an Employee Discount For Everyone Program, which applied employee discounts to consumer purchases of its vehicles. The promotion helped boost sales in the short term but hurt the automaker’s bottom line to the tune of a $8.56 billion loss last year.

For its current initiative, Toprak said: “I think [GM’s decision] is a positive move overall and the fact that they are backing vehicles with longer warranties shows that they are confident about their product.”