Warranty claims cost DCX $6.1 billion last year

One of the key challenges of turning around the misfortunes at Chrysler will be to improve the levels of warranty claims, which last year cost it and German parent Daimler a staggering $6.1 billion. Though the data didn’t separate which carmaker within the group had the highest claims, Chrysler’s vehicles have consistently ranked below industry averages for quality. Even Mercedes-Benz has stumbled in recent years with major quality issues in its usually bullet-proof passenger vehicles.

The results were a shocking 36.8% higher than the second worst ranked company, GM, whose claims totaled $4.46 billion last year. Close behind was Ford on $4.10 billion and Toyota with $2.37 billion, according to Automotive News.

Considering that Chrysler has just offered a lifetime warranty for its powertrains, the issue of escalating claims costs is an even bigger factor in seeing Chrysler return to profitability. Things are looking up. According to Chrysler's executive vice president Frank Klegon, warranty costs have fallen 40% over the past five years and that most of the $6.1 billion total is actually due to the expensive repairs for Mercedes branded models.