Warranty Payments Method

Refund for labour provision

The correct labour time calculation for the interventions performed under warranty is key factor for the proper claim filling.

An automatic system has been created in order to check and manage labour time and make the authorization process easier.

For details about the automatic system see the paragraph “9.2.3 Warranty claim filling/ Labour Time calculation” of this manual or the Circular letter “MAS000591_Labour Time Calculation”.

Circular letter MAS000591 “Labour Time Calculation”.

Warranty Labour Rate Review (Not valid for Maserati North America and Maserati Canada dealers)

Maserati allows a warranty labour rate review no more than every 12 months. This review could be proposed by the dealer through ABM or on Maserati initiative.

For the warranty rate update, Maserati defines every year reference rates for warranty and retail for each specific Market.

These rates are calculated as the average value of the competitors rates (collected by a benchmark related to previous year) and Maserati network rates, both applied in the Market.

A warranty rate increase is possible only if both following conditions are fulfilled:

the retail rate has been updated at least from 6 months;
the ratio between current warranty rate and new retail rate is lower than the ratio between reference warranty rate and reference retail rate (related to the specific Market):

WR_dlr/RR_dlr < WR_Mkt/RR_Mkt

Where:

WR_dlr is the current dealer Warranty Rate
RR_dlr is the dealer Retail Rate
WR_Mkt is the reference Market Warranty Rate
RR_Mktis the reference Market Retail Rate

Moreover, the dealer retail rate is checked by at least 15 invoices to customers issued in the last 6 months.

The agreed warranty rate is a certain percentage of the retail rate; this percentage could change according to:
The time elapsed since the last warranty rate update;
The standards compliance, the audit result and the KPIs achievement;
The comparison between the rates applied by dealer and the ones referred to the specific Market.

Furthermore, the maximum warranty rate currently agreed by Maserati is 85% of retail rate.

The detail of the necessary steps for the new warranty rate calculation are reported below:

1. Evaluation of time elapsed since the last rate update

For each year elapsed since the last update a quote of 1% is added to the current warranty rate:

Date last increase – Date review request = n. years elapsed → n% is added to current warranty rate

Therefore, the warranty rate increase due to years elapsed is:

WR_{increase_years} = WRdlr*(n. years elapsed)%

rate.

2. Evaluation of standards compliance, audit result and KPI’s achievement

The main parameters to be analyzed currently are:

Weekly job and number of technicians
Corporate identity
Training certification
The result of last audit carried out not older than 6 months
KPI’s: Service Entry Days Down, Service Entry Delay and Campaigns fulfillment

For each parameter complied a quota of 1% is added to the current warranty rate, so the warranty rate increase due to standards, audit and KPI’s (generically named “WRincrease_parameters”) is:

WR_{increase_parameters} = WR_dlr*(n. parameters complied)%

Considering both increase defined at point 1 and 2, the warranty rate updated is:

WR_updated = WR_dlr +WR_{increase_years} + WR_{increase_parameters}

3. Evaluation of the ratio between warranty rate and retail rate

If the dealer retail rate is lower than the reference retail rate of the Market, another quota of 1% could be added to the new warranty rate already calculated.

Therefore we must compare the dealer retail rate and the reference retail rate of the Market:

RR_dlr < RR_Mkt

If this condition is fulfilled, a second necessary condition must be verified to increase the warranty rate updated: the ratio between warranty rate updated and retail rate of the dealer must be lower than the ratio between reference warranty and retail rates of the Market.

WR_updated/RR_dlr < WR_Mkt/RR_Mkt

If both conditions are fulfilled, the warranty rate updated will be increased of 1% and the warranty rate calculated is:

WR_calculated = WR_updated + (WR_updated* 1%)

If one of the above mentioned conditions is not verified the warranty rate calculated is equal to the one calculated at point 2:

WR_calculated = WR_updated= WR_dlr +WR_{increase_years} + WR_{increase_parameters}

Considering that the maximum warranty rate currently agreed by Maserati is 85% of retail rate, the new warranty rate (agreed rate) will be at maximum equal to 85% of retail, therefore:

If WR_calculated > (RR_dlr * 85%) → WR_agreed = RR_dlr*85%

If WR_calculated < (RR_dlr * 85%) →WR_agreed = WR_calculated

In case of warranty rate review required by dealer, the ABM must provide to Maserati Warranty and Service office the hereunder documentation:

Competitors benchmark relating to the city of the dealer (not directly used in the warranty rate update calculation);
15 invoices to customers issued in the last 6 months;
“Warranty labour rate review request” form filled-in by ABM.

Once defined the warranty rate update, the Service Manager shall countersign for acceptance the "Warranty labour rate review" letter sent to him by the reference ABM.

Please, note that the agreed warranty rate could be reviewed every year considering the standards compliance and the actual retail rate applied.

A sample will clarify the warranty rate update calculation.

Sample

Data collection:

Current dealer warranty rate: WR_dlr = 95,00 €Current dealer retail rate: RR_dlr = 159,90 €Percentage ratio warranty rate/retail rate: WR_dlr/RR_dlr = 59%

Proposed dealer warranty rate: WR_prop = 105 €Reference Market warranty rate year 2015: WR_Mkt = 113 €

Reference Market retail rate year 2015: RR_Mkt = 131 €

Percentage ratio warranty rate/retail rate: WR_Mkt/RR_Mkt = 86%

Conditions to be satisfied:

The dealer retail rate has been updated at least from 6 months (evidenced by 15 invoices to customers): OK → Proceed with the second condition check
WR_dlr/RR_dlr < WR_Mkt/RR_Mkt = 59% < 86% OK → Proceed with the warranty rate update calculation

1. Evaluation of time elapsed since the last rate update

Date of last increase: 11/02/2012

Date of review request: 08/09/2015

Date last increase – Date review request = 2015-2012 = 3 years elapsed 🡺 3% is added to current warranty rate

Therefore, the warranty rate increase due to years elapsed is:

WR_{increase_years} = WR_dlr*(% increase due to years elapsed) = 95,00 €*3% = 2,85 €

2. Evaluation of standards compliance, audit result and KPIs achievement

Information reported by ABM and verified by Maserati Warranty and Service are:

Weekly job: 20/week, number of technicians: 2 OK → 1% is added to current warranty rate
Corporate identity: OK → 1% is added to current warranty rate
Training certification: NOT OK → 0% is added to current warranty rate
Last audit result, Date of Audit: 15/07/2015 : OK → 1% is added to current warranty rate
Service Entry Days Down, Service Entry Delay and campaigns fulfillment: NOT OK → 0% is added to current warranty rate

Therefore, the warranty rate increase due to standards, audit and KPI (parameters) is:

WR_{increase_parameters} = WR_dlr*(% increase due to parameters complied) = 95,00 €*3%= 2,85 €

The warranty rate updated, considering both increase defined at point 1 and 2, is:

WR_updated = WR_dlr +WR_{increase_years}+ WR_{increase_parameters}= 95,00 €+2,85 €+2,85 €=

100,70 €

3. Evaluation of the ratio between warranty rate and retail rate

Now we can compare the dealer retail rate and the reference retail rate of the Market:

RR_dlr< RR_Mkt → 159,90 € < 131,00 € NO → 0% is added to warranty rate updated

Considering that the first necessary condition is not satisfied, in this case the second necessary condition (WR_updated/RR_dlr < WR_Mkt/RR_Mkt ) will not be verified and the warranty rate updated will not be increased of 1%.

Hence, the warranty rate calculated is equal to the warranty rate updated (calculated at point 2):

WR_calculated = WR_updated = 100,70 €

As last step we must verify that the warranty rate calculated is lower than the 85% of dealer retail rate:

WR_calculated < RR_dlr * 85%

In the specific case, the warranty rate calculated (100,70€) is lower than the 85% of the dealer retail rate (159,90 €), as shown hereunder:

100,70 € < (159,90 € * 85%) → 100,70 € < 135,91 € OK → WRagreed= WRcalculated = 100,70 €

Therefore, the final update is summarized below:

WR_agreed = 100,70 €

% update of warranty rate = 6%

% of retail rate = 63%

The “Warranty labour rate review form” properly filled-in is reported below.

Warranty Labor Rate setting for New dealer

The agreed warranty rate is a certain percentage of the retail rate; this percentage is equal to the ratio between the reference warranty and retail rates defined by Maserati every year for each specific Market. These rates are calculated as the average value of the competitors rates (collected by a benchmark related to previous year) and Maserati rates, both applied in the Market.If the new dealer will work in a Market in which no other Maserati dealers are present, the reference rates calculation is based on the competitors benchmark provided by the ABM.

The retail rate proposed by dealer is another analyzing parameter to define the dealer warranty rate; it must be aligned to the reference retail rate of the Market.Furthermore, the maximum warranty rate currently agreed by Maserati is 85% of retail rate.

Consequently, if the ratio Warranty rate Market/Retail rate Market is greater than 85%, the agreed warranty rate is equal to 85% of retail rate:

If WR_Mkt/RR_Mkt> 85% → WR_{dlr_agreed} = RR_dlr*85%

If WR_Mkt/RR_Mkt < 85% → WR_{dlr_agreed} = RR_dlr* (WR_Mkt/RR_Mkt)

Where:

WRdlr_agreed is the agreed dealer warranty rate for the new dealer;

RRdlr is the dealer retail rate;

WRMkt is the reference warranty rate of the Market;

RRMkt is the reference retail rate of the Market.

The necessary documentation, that must be provided by ABM to Maserati Warranty and Service, is listed below:

•Competitors benchmark relating to the city of the dealer (directly used in the warranty rate calculation only in case of new Market);

• “Warranty labor rate setting (new dealer)” form filled-in by ABM.

RR_Mkt is the reference retail rate of the Market.

Sample

Data collection:

Proposed dealer warranty rate: WR_prop = 100 €

Proposed dealer retail rate: RR_dlr = 130 €

Reference Market warranty rate year 2015: WR_Mkt = 113 €

Reference Market retail rate 2015: year RR_Mkt = 150 €

Percentage ratio warranty/retail: WR_Mkt/RR_Mkt = 75%

Once the above mentioned data are available, the warranty rate is calculated:

WR_{dlr_agreed} = RR_dlr* (WR_Mkt/RR_Mkt) = 130 € * 75% = 97,90 €