Chrysler is launching a new dealer process to submit warranty repair of paint, glass and trim damage. Under the new rules, dealers must submit digital images of the damage with the pre-authorization request to the Central Warranty Contact Center. Chrysler promises dealers faster authorization and payment processing: repair pre-authorization will be granted within 15 minutes of receiving the digital images, and payment of most claims within 48 hours. Traditionally, the pre-authorization and approval pr
Chrysler is also reinstating an old policy that requires dealer service technicians to use online technical resources before calling Chrysler's STARcenter technical support hotline. Moreover, technicians now must proactively close all STARcenter calls; a technician that has more than three open calls will not receive further assistance until these calls are closed. This is reminiscence of DaimlerChrysler's "parts restriction" policy that prohibited dealers to replace certain parts that had high turnover and no fault found (NFF) rate unless a STARcenter specialist reviewed the complaint and pre-authorized the repair.
Chrysler is also seeking to further reduce its warranty exposure by forcing suppliers to improve warranty claims handling. Chrysler wants its suppliers to implement the new AIAG Consumer-Centric Warranty Guidelines – a warranty process self-assessment and improvement initiative. Chrysler intends to audit its suppliers to ensure that they are undertaking the self-assessment and putting improvement action plans in place. A Chrysler representative implied that that suppliers that do not improve risk losing their business.
So Chrysler is determined to control the volume of dealer claims which in 2009 shot up from 3.5% of revenue to 4% (compare this with the average claim rate of the other four top automakers, which is less than 2%). Furthermore, it needs to recover as much as it can from its suppliers that typically spend less than 1% of their revenue honoring warranty obligations.
While these policies are meant to improve process efficiencies from Chrysler's point of view, they may come at the cost of antagonizing both dealers and customers. Chrysler needs to make sure that dealers view the new guidelines and the additional procedural and reporting burden are fair and reasonable, and do not come at the expense of customer satisfaction and brand loyalty, which Chrysler can hardly afford.