Boat/Motor Warranties - why so SHORT compared to Cars???

[TrepMan]

OK this whole OPTI discussion got me thinking (I know that's how I get into trouble about the poor state of boating warranties. Now let me say, as I have many times, i've had ZERO problems with the Tracker warranty or the extended warranty i've got from Tracker. This is more directed at the base warranty provided by ALL boat companies and parts/Outboard manufacturers. I know Merc and others in the last year have offered 3-5 year warranties on specific models of Outboards, but the typical warranty is still 1 year.



It still surprizes the HECK out of me that the amount of $$ you pay (realize I kept my purchase to $10k) for a boat and motor ONLY comes with a 1 year factory warranty. I'd LOVE to see how many cars Hyndai/Kia/Daewoo would sell if they offered ONLY a 1 year warranty, let alone the U.S. Big 2 (I consider Chrysler a German company now since it's OWNED by them). I know the Hulls have typically a 5-10 year warranty, and the motors CAN come with longer warranties from the manufacturer WHEN they see a need. If the products, and this goes especialy for outboards, are that proven WHY not give a longer warranty. Why, because then CAN and we WILL buy them anyway!



MAN what would someone like Tracker do to the industry if they came out with a 3 year bumber-to-bumper (sort of) warranty including motor, trailer, trolling motor, electornics...! It would show they are solid in quality and would do nothing but increase sales!!!

 

[Rob LaMoy]

Good point Trep. Sad truth is many parts would fail in that time frame and they would lose their shirts. Manufacturers need to step up their quality. Lots of little things keep breaking. But then the buying public would spend the extra $$$ it would cost to engineer a better motor or part or cover the warranty when joe blow down the road is selling a 150 hp too, yeah sure it's only a 1 year warranty, but hey it's $2,500 less! Either they ALL have to do it, or it won't fly.

 

[James D.]

i here ya trep. i think new boat motors should have much more of a warranty than one year. i've always bought used and have never had the base warranty or an extended warranty. i like the bumper to bumper warranty idea.

 

[TrepMan]

Here's my problem - I can buy a 1 year old Hyundai Accent 2door hatchback with 16,000 miles on it that STILL has 4 years and 34,000 miles on the FACTORY and COMPLETELY transferable (with nothing for me to do to transfer it) new car warranty of 5 years/60,000 miles. Now this car will hold 4 adults (more then most boats), go 100 miles an hour (more then most boats), is water tight in the rain, has a radio, LOTS of moving parts and computer HW/SW and a EFI 92hp 4 cyliner water cooled 4 stroke engine! OK I know that fiberglass boats are mostly hand made, and this is a LOW end brand/model of car - BUT - why does a new 16ft fiberglass boat with a 50hp 2 cycle engine cost over $10K with only 1 year warranty?



Is it truly, as Rob said the quaility and dependability of the parts are that poor? Is it because they CAN - i.e. no one else has offered a better warranty so why try??

 

[David Jordan]

That costing more money to make a good motor is false.

I suspect that their quality can only afford them to offer 1 year warranty. As a 6 Sigma blackbelt in design, I can tell you it cost more money ( in the long run) to make a marginal design than to do it right the first time. Remember, that if the finished product has a lot of repairs then it most likely is not easy to build in production and requires lots of rework. These guys need to adapt statistcal process control, That's what kicked the US auto makers in the butt. I suspect that they do not have good control on theie tolerances and do not understand how this affect their bottom line. The first motor company to do this will be able to offer longer warantys and capture the market ,reduce the price of their motors, and improve customer satisfaction.

 

[Staci Matheis]

Michael, there are a number of factors here.....



I think that the largest one is the way owners use the two products. Going back and forth to the grocery store puts no where near the strain on components as does bouncing them over wakes, over-reving when the prop comes out of the water, running fuel through them that has constantly been exposed to water..... Generally, we abuse our boats in a way far beyond that which we do to our automobiles.



Production levels. Several million automobiles are produced by each of the major manufacturers every year. If we combined the total annual production of Mercury, Yamaha and Evinrude - I wonder what it might amount to..... When you produce something on the immense scale that the auto manufacturers do, you get mighty, mighty good at it!



Finally, there is the marketing aspect. The marketplace has not yet demanded that the outboard manufacturers accept a greater risk.



me!

 

[Chad Justice]

Well, automobile warranties aren't what they used to be.. Nowadays, if you cannot prove beyond the shadow of a doubt that you have had regular maintenance performed by a qualified technician, you're warranty is pretty much void.. If you have taken your vehicle off road, VOID.. If it's been in an accident, it's hard to get things covered..... If I ran my truck at 5500RPM constantly, let it overrevv to 8 or 9K as the wheels come off the ground from jumping sand dunes, etc etc, I can pretty much guarantee that I would, from that point on, have *0* years warranty...



Don't get me wrong, marine motors need at least 3 years warranty... I'm just playing the devils advocate, I guess.

 

[Rich Stern]

OK, first of all, car versus marine motor usage:



Your car motor spends much of it's time outputting about 25% of it's rated power to keep you moving down the road, working against light wind drag and rolling resistence. It does so in a highly controlled environment (paved roads with rules about how fast you can go).



Your boat motor spends much of it's time outting 80% of it's power rating, trying to overcome difficult water resistance. It's also often at 90% to 100% output (how much time does your car motor spend at the redline in a year...30 seconds, maybe...your auto transmission doesn't even let it stay there). A boat motor usually needs 60% of it's rated power just to keep the boat on plane.



Next, for both boats and motors, we have the issue of volume. More automobiles motors are made in an hour than outboards are made in a year. So R&D costs for new developments and reliability improvements are spread out over many more units. It's far cheaper to apply sophisticated management techniques to automobile technology than it is boat technology. Show me a Sigma 6 process that can be amortized over 5,000,000 automobiles, and I'll show you a marine manufacturing process that cannot handle the additional cost per unit. Marketplace realities.



Sometimes you simply cannot justify an investment based on the potential market return. Marine ventures often have that characteristic. That's why boats are still built by hand, and not by robots.



Warranty is a cost component of a boat. Boats cost a lot to manufacture because of the hand labor involved. Given the realities of the size of the marketplace and what the consumer is willing to pay, it's just another cost to be managed to produce a competitive product.



Ranger offers great customer service, right? Something breaks or tears, they send you a new one with a smile and a "no problem," and don't bother to charge you. But some of their boats cost $45,000 out the door. So, you are paying for that high level of service...in effect, an informal extended warranty.



FYI, you can buy a semi-custom, 80 foot, $4,000,000 Hatteras, and you'll get a one year warranty, and maybe a ten year warranty on hull blisters. So, if one of your $50,000 600hp MANN diesels fail, or the $15,000 20kw Onan genset fails, it's on you, even if you dropped 4 extra large on it only 15 months ago.

 

[Carlos Hathcock III]

Rich,

Now that is what I call an education. thanks



Carlos

 

[TrepMan]

WOW Rich and Rob, that gives me more appreciation for the mechanics. So, it sounds like it is a combination of the level of hurt (constant, hard performance against the parts) against the parts AND the volume which has yet to bring quality and tollerances (at a reasonable cost) to an affordable level.



The info on the $4m Hatteral is AMAZING!!! I guess i'll stay with my $10k tin boat with its 5 year extended warranty.



Thanks for the input gang, and keep it comming!!!

 

[Staci Matheis]

Ok, Michael..... One last tidbit for you to roll over in your head this weekend.....



A "common" warranty on diesel engines for over-the-road trucks is 5 years/500,000 miles.



10 speed transmissions go for 5 years/750,000 miles.



13 speeds are usually given a 5 year/500,000 mile warranty.

 

[TOMMY RICH]

You guys can explain it all ya' want....it still does not make sense. Someone's makin' money...

TEE

 

[Texas Transplant]

Nice information here. I'll offer my opinion.



The mfg's can do just about what they want. They have an 'unspoken' collusion regarding warranties and the unbelieveable prices they charge for these engines. Though they might not sell as many engines as the auto dealers do, they still have access to very sophisticated manufacturing processes. They are mass produced, not built by hand.



Since for the most part, boats and/or motors are pretty much under the category of 'pleasure', they can charge what the market will bear. Also, they have the - 'I want to be like Kevin, Jimmy, Roland, Hank, etc. , etc.'. They run the big expensive engines, we want one too.



The engines are designed and manufactured to run at rated RPM's/power. Yes, they do get run at higher power than a comparable automobile, but then again, they don't have to go through the extremely high heat and stop and go traffic either.



A brand new V6 engine for my Buick LeSabre was $3,600.00 installed, if I would have chosen to go that route. That's a complete fuel injected engine. Not rebuilt. You can't tell me that a new 90hp Merc 2 cycle engine costs anywhere close to the approximate $8,000-9,000.00 that they charge (or thereabouts).



Stepping down from my soapbox.



Tex

 

[Rich Stern]

TEE, pardon me, not trying to insult you, but need to study a bit more if it doesn't make sense to you.



First of all, companies are in business is to make money for their shareholders. It's their primary reason for existence. If you live in a capitalist society, you shouldn't begrudge someone a reasonable profit margin.



Second, you can review the financial statements of any public company in the boating industry. You will find that building boats is not some magic formula for accumulating fabulous wealth. As a matter of fact, as a business, it is plagued with problems because recreational boat sales, as a luxury item, die a fast death when people have no money to spend. The marine business has more than it's fair share of failed companies, and they often fail due to simple economic realities rather than poor management or bad product. It's a tough business to make money in.

 

[Rich Stern]

Tex, it's the same economic issue previously discussed.



Look at Brunswick's (Mercury parent) financial statements. There is no hidden magic. They sold $1.56 billion worth of marine engine products and services last year. They earned a $173 million on those sales. That's approximately an 11% net margin. Considering the capital required to be in that business, the potential consumer and environmental liability, and the wild swings associated with the marine business, it doesn't look that appealing to me.



If you put your money in Brunswick stock 5 years ago, you've lost about 30% to date.



If you put your money in OMC stock 5 years ago, you lost 100%.



Yeah, they must be raping us on these motors.

 

[Texas Transplant]

Rich,



I think that your information is most likely right on. No argument there. However . . . .



If they sold 1.56 billion worth of engine products/services last year and made $173 millon (net 11%), that's fine. How much would they have made if they were more efficient? Are they truly spending their money wisely? I don't know, because I'm not familiar with the company and the 'inside' story. However I do know this. If it's such a cost intensive business, with a history of poor returns, why did Honda and other Japanese companies get into it?



I have no argument with you, or your position. But personally, I think that they are sticking it to us on these motors.



And in most of our cases (Nitro and Tracker fans), we don't have much choice or ability to negotiate a better price, unless we switch to another manufacturer/dealer where you can pick and negotiate your package as you see fit.



Good discussion.



Tex

 

[Rich Stern]

Tex, if you have faith in free markets and competition as powerful, self-regulating forces, you can rest assured that decisions either get made well, or punishment is handed out in large doses (see OMC).



Honda and Yamaha (and Tohatsu/Nissan and Suzuki) were invested in heavy industries, including internal combustion engines, prior to joining the marine engine fray. It's a logical extension. Japanese executives can get excited about 11% earnings because they tend to stay in an industry forever.



Did you notice that Briggs and Stratton just brought out a new, 4hp outboard motor? Pricing is around $600. Great deal, since all of the other competitors are twice that, right? It is until you look at the product's design and realize that B&S finally figured out what to do with all of the extra capacity at the lawnmower plant.

 

[Chad Justice]

Just to add another point about Japanese companies and the marine industry, Toyota recently stopped producing marine engines if I'm not mistaken. They're focusing their 'extracurricular' energy into aircraft now.



BTW, Yamaha is offering a 3 Year Limited Warranty on their 4-Stroke outboards... It's 2 Year for 2-Strokes..

 

[Tom Mann]

I can understand why they would focus on Aviation. After all, that is how Toyota got started. They were one of the manufaturers of the Zero.

T

 

[Rich Stern]

T...they made garment weaving machines quite a while before the Zero. I guess when Tojo tells told you to change your production line, you have no choice.



CM, hadn't heard that Toyota Marine was calling it quits. Fascinating. That was a short/sweet stay. I'd read good things about both the boat and the motor. I guess even a trouble free engine and a good boat aren't guarantees. I read that the hulls were made by the same folks who make Gamblers.

 

[Chad Justice]

Rich, as far as I know it's true.. My brother works for a branch of Toyota Motor Sales, and he was told that they were out of business. If you go to their old website, www.toyotaepicboats.com, it's a broken link.



My Stepdad and Father-in-Law both work for Toyota's manufacturing side, but I haven't heard either of them mention it.. As far as Toyota quality goes, I worked production in one of the plants for 6 mo's total as a temp. I can tell you from first hand experience that when a team member shuts down the line because of a problem, his team members (who are now facing even MORE overtime) typically say 'Nice catch!' or 'Good eye!' instead of 'Why'd you have to point that out!! We'll be here forever now!!!' Right down to the common line worker, they all seem to care. It's pretty cool, I gotta say!!

 

[TrepMan]

Rich - question - why is it, assumed, bad that B&S are using the lawnmower plant (and most likely parts) for the outboard? I am learning a lot from you guys, just not there yet.



I remember buying my first new OB, a 5hp Mariner back in 1992, that same year I bought a 5hp B&S driven lawm mower. The Mariner was $899 the mower was $125! I know as i'm learning from this board and others, that the cost is higher on an outboard and it takes more wear/tear, but I also run my mower at 100% WOT all the time. In my current rider it's a 12 1/2 hp and it mulches and DRIVEs the tractor at WOT for 7 years.



Here is my next question, assuming everything else above, if the costs high and quality/durability is poor (i.e. if they offered a longer warranty they'd loose $$ due to the repair costs) A) why do we keep buying them, B) how come most of us run (just an informal assumption) our NEW OB's for 3-5 years without ANY problems, and C) anyone have any ideas on how/what it would take to improve the quality/durability?

 

[Rich Stern]

Michael, if you take a look at the link below, you can see the details of the new B&S outboard.



Here's what's bad, in my opinion:



It's literally a lawmower engine mounted on an outboard leg. They specifically recommend against use in saltwater, which suggests that they didn't even reengineer the powerhead for use in a marine envrionment. Hardware on a typical B&S lawnmower engine is not particularly good. Soft metal parts that are subject to fatigue breakage, and marginally fitted fasteners that tend to come loose, in my experience. It has the exact muffler and muffler heat safety cage that my cheapo B&S powered pressure washer has (which broke, in light duty use). Marine outboards, even the cheapest ones, have below the water exhaust. This product will be a noisy, despite the fact that it is a four stroke outboard, and will contribute to negative perceptions about marine outboards at a time when marine outboards are actually getting more environmentally friendly.



Other than that, it's fine.



Seriously, if somebody needs a low cost four stroke outboard in California, this may be the only way to go. But there is simply no way I would pay $600 for that product when just a little more money buys a 4hp 2 stroke marine outboard that is based on decades of product experience and refinement in a marine environment.



If B&S can sell them, more power too them. I have respect for honest companies trying to sell product into free marketplaces, even if I don't care for the product.
http://www.briggsandstratton.com/Ma...main/RealBriggs/WebSite/NA/EN/new_products/ou

 

[TrepMan]

Rich - Good information, but as I said not being a Motorhead, not recommending use in Saltwater i believe covers a LOT of the current 2 stroke outboards. But without discussing the B&S further (though i'd like to see one side-by-side with a traditional 2 stroke for fun), what's your take on my other questions - B) how come most of us run (just an informal assumption) our NEW OB's for 3-5 years without ANY problems, and C) anyone have any ideas on how/what it would take to improve the quality/durability?



On the warranty problems on OB's (granted you guys with the BIG motors may have more problems then us little guys, little Motors that is - except Scott!) it seems that if i've treated mine right with scheduled maintenance (like I have to on my car/van/truck to keep the warranty valid) am I an exception not the rule? I mean even a 2year warranty would give me a better feeling to buying new vs. used. As it is when (many years from know i'm sure) I buy another boat, since the factory warranties are only 1 year (and the outboard is the biggest expense) I don't see the benefit to a new one. Assuming I get a used one from someone I know who has maintained it (you or Tex for instance) and have had it checked by a qualified mechanic.

 

[Steven Atwell]

I have a carbed 150 that is almost 9 years old. With the right maintenance, it still runs like all 150 ponies are kicking strong. I believe the warranties could be longer without any major hits to company profits, as long as the customer follows the recommendations carefully...........sa

 

[Staci Matheis]

SA -



Warranties DO NOT hit company profits.



Warranties are like insurance policies..... They are not free. The total cost that the company expects to encounter on warranty work (plus a little extra just to be safe) is built right into the selling price of the outboard/boat/automobile/reel/pogo stick.....



You and I pay for every warranty repair ever done on any type of item we purchase.



me!

 

[Rich Stern]

Uh, Scott, lets try that again. Warranty cost shows up as a cost line item for any business that has such obligations. Often, companies with large warranty exposure have to reserve projected warranty expenses ahead of time to account for the potential liability. It's a cost of doing business, like the paint on the lower unit or sweeping the plant floor. All of those things get priced into the motor.

 

[Staci Matheis]

You are quite right, it would show up as a cost item from the accounting standpoint..... Then, that cost is reclaimed elsewhere - our pocketbooks.....



Like we both said:

"All of those things get priced into the motor."

or

"You and I pay for every warranty repair ever done on any type of item we purchase."



Great minds DO think alike!