Warranty costs in the automotive industry: case study and analysis of the influencing factors

In the automotive world, warranty costs have a significant impact on the overall expenses incurred by manufactures. Furthermore, during the last years, they have undergone a significant increase due to several factors, in particular for the electrification of vehicles. For these reasons, understanding how to reduce them is crucial for increasing the profitability and the efficiency of carmakers. So, this Master’s Degree thesis has as main aim the study of the warranty costs in the automotive world: after an analysis of a real case, the factors influencing these types of expenses have been explored in depth. This study derives from an internship done in Accenture, during which a project for an important carmaker has been followed. This project consists in reducing the warranty costs through the analysis of the workshop repair times of two families of commercial vehicles. The thesis begins with a description of the internship and the company Accenture, together with a general introduction on the warranty costs, highlighting their increment in the last years. Then, a focus on the methodologies used for measuring the work time is done: the origin of the work measurement, as well as the various existing techniques, like the stopwatch method, the work sampling and the predetermined motion time system, are described. After, the case study of the carmaker is investigated: a detail of the vehicles studied is followed by how the workshop repair times have been analyzed, showing also the results and the estimated saving that can be obtained by reducing these times. Finally, a correlation between the warranty costs and the factors influencing them, like the electrification, the standardization and the reliability of vehicles, is conducted. So, as highlighted in this thesis, managing effectively factors like the standardization of the components, the reliability of vehicles and the reduction of the workshop repair times is a key factor in the reduction of warranty expenses, even if the increasingly widespread electrification of vehicles augments the systems complexity and, so, the repair costs.