Ford saves $1.2 billion in warranty costs through improved quality

Saving money has become as important, or even more so, than making it in recent months for many carmakers. There just aren't enough buyers actively seeking new cars, so cutting costs is the only way to improve one's position. Today Ford announced it has saved $1.2 billion in warranty costs over the last two years thanks to improved quality cars.

Ford, like many of its rivals, has embarked on a savings campaign that involved selling off assets, reducing model development plans and cutting back on advertising. The announcement of the warranty savings illustrates how investments in improved cars can pay off not just in sales figures, but in long-term support.

Rising to the top of the automotive quality charts hasn't been an easy task, but several consumer ratings metrics have consistently placed Ford's initial quality on par with Honda and Toyota - good company in that regard. “We’ve reached the point where our initial quality is second to none among the full-line manufacturers. We expect that high quality to be reflected in future high-mileage surveys as our new models age,” said Bennie Fowler, Ford group vice president for global quality.

Among the best-performing models were the Mustang GT500, which had the smallest number of 'things gone wrong', or TGW's in industry-speak, of all sports cars. Overall, Ford, Lincoln and Mercury brands reported a 50% lower warranty repair rate than in 2004.

Along with the announcement Ford is reaffirming its commitment to quality, noting that the savings are their own reward, and can help Ford move forward with new product development as well. “I see the recent $1.2 billion in worldwide warranty cost savings as a compelling reason to continue down this path,” said Curt Yun, Ford's global warranty director. “Instead of setting aside those funds to fix cars, we’d much rather invest it in exciting product programs for our customers.”

Among the most recent of Ford's new products are the Fusion and Mercury Milan hybrids, which recently secured certification as the most fuel-efficient mid-sized cars in America.