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Market Trends
Internet, Rental Use Top Warranty Concerns
Construction equipment makers are increasingly using the Internet to process warranty claims, and are concerned about the consequences
of growing equipment rentals on their warranty claim rates.
These are some of the findings of CIMA's second comprehensive warranty policies and practices survey, which was conducted last
year. (see related story page 3). Full details of the 270-page survey are available to survey participants.
Internet Usage Grows
The share of equipment makers that receive warranty claims via the Internet grew from 2% in 1997 to 17% in 2000. Use of other electronic
systems to receive claims grew from 14% to 19%. Most equipment makers still accept warranty submissions via paper, although respondents
citing this submission method dropped from 95% in 1997 to 87% in 2000. (Results total more than 100% because respondents were asked to
check all that apply.)
Not surprisingly, equipment makers with the largest sales volumes (more than $100 million) were more likely to receive warranty claims
via the Internet.
Even if equipment makers don't currently accept warranty submissions via the Internet, many see it as an important issue in the
near future. In an open-ended question asking respondents to identify the top four issues affecting construction equipment warranties
in the next five years, 14% named Internet warranty filings as one of those issues.
Impact of Increased Rentals
Just as many respondents – 14% – mentioned warranty claims by rental houses as one of the top four issues for the next five
years.
Some construction equipment makers may be adjusting warranty policies to reflect usage by rental houses. For example, in 1997 more than
65% of respondents said their warranties were based only on the length of time from the date of purchase, rather than hours of use or a
combination of both.
In 2000, that figure dropped to 59%. And in 2000, the companies that said their warranties were based on a combination of length of time
and hours of use rose to 40%, from just over 30%.
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