Warranty management – its essence, process in the organization and requirements of a quality management system certified for compliance with IATF 16949 were discussed in the first part of the article on warranty management. It is crucial to not only recognize the customer requirements but also statutory and regulatory requirements connected to the specific market. In next chapters we developed some main markets to highlight basic requirements.
Warranty management in IATF 16949:2016: Chapters 8.2 and 8.3
In addition to the requirements of a QMS certified for compliance with IATF 16949 mentioned in Part 1 of the article, we would like to draw attention to Chapters 8.2 and 8.3 – Design and development. They show that it is crucial not only to recognize the customer’s requirements, but also the statutory and regulatory requirements related to a specific market. In the next part of the article, we have developed several main markets to emphasize the basic requirements.
Legal Warranty Requirements in the EU Automotive Market
An effective warranty management system must also align with legal requirements—especially in regulated markets like the European Union. Automotive manufacturers operating in the EU are obligated to comply with consumer protection laws that define minimum warranty standards.
What the Law Requires
Under the EU Consumer Sales Directive (Directive 1999/44/EC and its successor Directive (EU) 2019/771), all products—including vehicles—sold to consumers within the EU must carry a minimum 2-year legal warranty. This applies even if the manufacturer or seller does not explicitly offer a warranty in writing.
Key legal points include:
- The seller (dealer) is liable, not just the manufacturer, although OEMs often support warranty costs contractually.
- The 2-year warranty covers non-conformities present at the time of delivery.
- The burden of proof is on the seller for the first 12 months (soon 24 months in many countries)—they must prove the product was not faulty at sale.
- Repairs, replacements, or refunds must be offered without significant delay and free of charge.
Manufacturer Warranties and Extended Coverage
While the legal requirement is two years, many OEMs voluntarily offer commercial warranties beyond the legal minimum—such as 3 to 7 years—for competitive reasons. These voluntary warranties must clearly specify terms and should not restrict the consumer’s rights under EU law.
Implications for Warranty Management
- Warranty systems must track legal vs. commercial coverage periods.
- Claims handling must differentiate between statutory and extended warranties.
- Communication with dealers and customers must be clear to avoid legal disputes.
- Project planning must account for legal exposure in every market where vehicles are sold.
Source:
Global Warranty Requirements: Other Key Automotive Markets
For global automotive manufacturers, warranty management must comply with varying legal standards across each market. Understanding local warranty laws is critical to avoid regulatory risks, reduce liability, and build trust with consumers. Below is a comparison of the most important global markets and their legal warranty frameworks.
Warranty management in United Kingdom (UK)
The Consumer Rights Act 2015 forms the legal foundation for automotive warranties in the UK, ensuring basic protections for buyers while allowing manufacturers and dealers to offer additional coverage.
- Statutory Warranty:
- The Act ensures that vehicles sold by dealers must be of satisfactory quality, fit for purpose, and as described.
- This statutory protection acts as a baseline warranty, even if no additional warranty is provided by the dealer.
- 30-Day Right to Reject:
- Buyers can reject a vehicle and request a full refund if it develops a fault within the first 30 days after purchase.
- Repair or Replacement (30 Days to 6 Months):
- If a fault arises between 30 days and six months, the dealer has one opportunity to repair or replace the vehicle.
- If the repair fails, buyers can demand a refund, though it may be reduced to account for usage.
- After Six Months:
- Buyers must prove that any fault was present at the time of purchase to claim repairs or compensation. This often requires an independent technical inspection.
- Manufacturer and Dealer Warranties
- In addition to statutory protections, most cars come with manufacturer warranties (e.g., 3 years/60,000 miles) or dealer-provided warranties.
- These warranties often go beyond statutory requirements but cannot override the rights provided by the Consumer Rights Act.
Source:
Warranty management in United States (USA)
In the U.S. market automotive warranties operate under the Magnuson-Moss WarrantyAct (15 U.S. Code Chapter 50). Core Provisions are:
- Warranty Disclosure Requirements:
- Warranties must be labeled “full” (covers all defects, no exclusions) or “limited” (specific exclusions apply).
- Terms must be written in plain language and made available where products are sold.
- Implied Warranty Protections:
- Merchantability: Vehicles must be fit for ordinary use (e.g., a car must drive safely).
- Tie-In Sales Prohibition: Manufacturers cannot void warranties for using aftermarket parts or independent repair services unless they prove the part/service directly caused the defect.
- Key Consumer Rights:
- Repair Flexibility
- Independent Repairs: Routine maintenance (oil changes, brake pads) at non-dealer shops does not void warranties.
- Aftermarket Parts: Use of non-OEM components is permitted unless proven harmful.
- Lemon Law Protections
- Federal Lemon Claims: Requires manufacturers to address defects after a “reasonable number” of repair attempts (often 2–4 visits).
- Damages: Consumers may recover diminished value (e.g., $10,000 for a $30,000 defective car) and incidental costs.
- Manufacturer Obligations
- Burden of Proof: Dealers must demonstrate causation to deny claims (e.g., show aftermarket part caused failure).
- Service Contracts: Extended warranties (“certified” plans) fall under Magnuson-Moss rules, requiring clear terms.
- Repair Flexibility
Sources:
Warranty management in China
China’s automotive warranty requirements are governed by the “Three Guarantees” policy (repair, replacement, return) introduced in 2013 under the Provisions on the Liability for the Repair, Replacement and Return of Domestic-Use Automobile Products. Key requirements include:
1. Scope of Application
- Coverage: Applies exclusively to domestic-use passenger vehicles (manufactured and sold in China.
- Exclusions: Vehicles for commercial, rental, military, or agricultural purposes are exempt.
2. Warranty Periods
- Repair Warranty: Minimum: 3 years or 60,000 km (whichever occurs first).
- Replacement/Return Warranty: Minimum: 2 years or 50,000 km (whichever occurs first).
3. Key Obligations
- Seller Liability: Dealers must directly handle repair/replacement/return claims and recover costs from manufacturers.
- Repairer Duties:
- Maintain adequate spare parts inventory.
- Provide loaner vehicles or transport compensation if repairs exceed 5 days.
- Manufacturer Responsibilities: Issue 3Rs-Warranty certificates and set compensation coefficients (0.5%-0.8%) for refund calculations.
Sources:
Automobile Guarantee Regulations for Automobiles used by Consumers have finally been promulgated
China’s New 3Rs-Warranty Policy for Domestic-Use Automobiles: An Overview
New warranty regulations take effect Oct. 1
Warranty management in Japan
Japan has no nationwide mandatory minimum warranty period for vehicles. Coverage is market-driven, with practices shaped by manufacturer policies and consumer expectations.
- Manufacturer Warranties:
- Standard: Typically 3 years/100,000 km (varies by brand)
- Extended Options: Many brands offer 5+ years via service-activated programs
- Used Vehicle Warranties:
- CPO Programs: Certified Pre-Owned vehicles include 1-3 year warranties after rigorous inspections
- Regulatory Context
- Product Liability: Governed by the Product Liability Act (PLA), requiring proof of defect causation
- Type Approval: Ministry of Land, Infrastructure, Transport and Tourism oversees safety/environmental standards but doesn’t mandate warranty terms
Sources:
Product Liability Framework: ICLG Japan PL Laws (2024-2025) and Japanese Law Translation
Let’s sum up!
Warranty management cannot be regarded as handling claims. The most successful companies don’t wait for problems to arise—they use warranty insights proactively to improve products and processes. By integrating warranty data into project management, design and development processes, and recognizing legal frameworks your organization can reduce failure rates, lower costs, and build greater customer trust.
Is your warranty process adding value or just adding cost?
At Qualitywise.pl, we help automotive and manufacturing organizations implement robust warranty management systems that support better design, stronger quality assurance, and continuous improvement. Contact us to discuss how we can support your team with Warranty Management according to AIAG CQI-14 training.
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For people who want to know more:
CQI-14 – Automotive Warranty Management: A Guideline to Industry Best Practices
IATF 16949: 2016 Requirements for quality management systems in serial production and the production of spare parts in the automotive industry, 1st edition, 2016
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