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3 RV OEMs Rate Well on Warranty Cost Study

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October 29, 2012 by   - () Leave a Comment

Looking to add some RVs or park models to your RV park?

The products manufactured by Cavco Industries Inc., Winnebago Industries Inc. and Thor Industries might be good choices, based on the decline in warranty costs at the three manufacturing firms in recent years.

The three companies fared well in a study conducted and published by Warranty Week. Click here to read the entire story.

In general, the magazine notes, warranty expense rates have been on a downward trend for most of the past decade. And most of the manufacturers are reducing their claims and accrual rates year after year. Some, however, continue to cut costs faster than their peers.

Among all the warranty providers, most are reducing the percentage of their revenue that's consumed by warranty expenses. But which are reducing their claims and accrual rates the most? And which are doing it over the long term?

The good news is that American manufacturers have not only been reducing their warranty expenses and reporting the figures in their financial reports, but also that they've been reducing those expenses as a percentage of sales from one year to the next. That's a big distinction, because during a deep recession warranty expenses will fall on their own, because there's less business activity all around. The question is whether they snap back to where they were once that recession ends.

So far, that hasn't happened. Warranty expenses are once again on the rise in 2012, but they're not back to 2007-2008 levels, although in many cases sales are. The result is that American manufacturers are paying out the smallest share of sales revenue ever measured — roughly 1.3% — to cover warranty costs. And that's a multi-year trend that began long before the recession.

Most Improved Companies of All

Overall, over the past decade, 32 companies got a perfect score: four claims rate reductions and four accrual rate reductions. Of those, 13 also made at least one of our top 10 lists. They include Cavco Industries Inc. and Winnebago Industries Inc. See chart below.

Among the 57 companies scoring five or six rate reductions out of a possible eight was Thor Industries Inc.

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