Case Study: Major US Automobile Manufacturer achieves over $250M annual warranty cost savings with Lumina Decision Systems (Analytica)

Auto Maker Saves $250M on Warranty Costs

Major US Automobile Manufacturer faced rapidly rising warranty costs—driven by longer warranty periods and broader coverage—that had grown to several billion dollars annually. An internal team was tasked with finding cost reductions and used Analytica, a visual modeling product from Lumina Decision Systems, because it could represent the complex system transparently and handle array-based analyses that spreadsheets could not.

Using Analytica, the team built a model quantifying key warranty drivers (launch costs, manufacturing quality, defect remediation, dealerships, servicing), ran sensitivity analyses and tornado charts, and identified previously unrecognized leverage points. With Lumina Decision Systems’ Analytica model they implemented changes that have saved the company over $250 million per year to date; the achievement earned a company-wide quality award and the model is being expanded to seek further savings.