Warranty Management System Market - Growth, Trends, Covid-19 Impact, And Forecasts (2021 - 2026)

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Owing to the increasing warranty claim processing issues, organizations worldwide lose thousands of dollars in revenue leakage every year. This has been acting as a major factor that is driving the demand for warranty management systems worldwide. Moreover, with the emergence of newer technologies and rising competition in the automotive and manufacturing industries, the need to automate warranty claim management processes has increased significantly.

- Warranty management solutions, through the automation of warranty claim handling and installed base asset tracking, primarily enable service organizations to create, administer, track, and process warranties, claims, and assets through their full lifecycles.

- As a result, third parties can submit their valid claims and receive credits. Customer service can also verify the coverage and initiate recovery, and field technicians can track asset history and replace the in-warranty parts. These solutions reduce the warranty cost to a minimum, automate warranty claims, streamline warranty management system, and increase service revenue to the maximum. This software benefits ...
... all stakeholders, including manufacturers, service providers, suppliers, dealers, and end-users.

- The growing production in the automotive industry is a significant factor driving the market growth, as the automotive and supply chain industries account for the largest share in the adoption of warranty software. The global automotive industry is also expected to observe a turnaround after a slump in sales during the previous year. A positive trend of growth is expected over the forecast period. Moreover, the consumer propensity toward the adoption of connected vehicles is also expected to influence the demand for automobiles across the globe, thereby, driving the market.

- Additionally, autonomous cars are expected to hit the road much earlier than most predictions, with the International Energy Agency (IEA) estimating the number of EVs across the globe to be 125 million by 2030 compared to 3.1 million units of EVs in 2017.

- Multiple government initiatives are also expected to drive the demand for warranty management systems. For instance, the German government's recent goals, to put six million electric vehicles on the road by 2030, and one million by 2020, are creating additional demand from the automotive sector.

- The adoption of blockchain technology for warranty management is trending in the insurance sector. It has the potential to help streamline the industry by securing supply chains and providing track-and-trace capabilities for products under warranty. Blockchain-enabled warranty software provides a closed-loop claims management process, which administers, processes. It tracks all warranties throughout their lifecycle to improve customer satisfaction, reduce service costs, and increase product quality.

- Multiple markets have been undergoing a considerable change in the past few months. These changes were primarily owing to the recent outbreak of the COVID-19 pandemic. As the disease has been spreading rapidly, multiple countries across the globe have ordered lockdown to maintain social distancing and slow down the spreading process. Due to the nationwide lockdowns, various industries were forced to halt their manufacturing units. Moreover, there have been restrictions put in place for cross-border trading within the countries and within the states. Owing to these conditions, the trading conditions in multiple regions have been affected. Countries across the globe are also facing economic crises, thus, affecting the major markets, including the warranty management system, in the world.

Key Market Trends

Cloud to Hold Significant Share

- Implementing a warranty management system on the cloud provides a high intensity of scalability, flexibility, and sharing capabilities with defined authority. The players are leveraging this opportunity to penetrate the market further.

- The proliferation of connected/smart devices and sensors that comprise the Internet of Things (IoT), as well as the amounts of metadata generated by different machine-to-machine (M2M) communications networks may offer manufacturers a new level of insight needed to intelligently update the warranty claims process and deliver a seamless customer experience.

- Companies are now migrating their data to the cloud, and industry players are offering cloud-based solutions, which may boost the market growth over the forecast period.

- The cloud-based IoT platform enables actions to be taken from the collected data, such as
predictive modeling, simulation, test hypothesis, and reporting. Also, organizations are rigorously investing in cloud computing across diverse industries, which may positively impact market growth over the forecast period.

- With advancements in the global manufacturing sector with Industry 4.0 and concepts, such as the Industrial Internet of Things (IIoT), the service providers have a massive opportunity to expand their business over the forecast period. The convergence of various technologies in the manufacturing sector, such as predictive analytics, Big Data, cloud computing, digital twin, and smart factories, may also drive the adoption of cloud-based warranty management systems.

North America to Hold Largest Share in the Market

- North America is one of the leading markets in terms of adopting warranty management systems across significant end-users. The region is also witnessing healthy growth due to the rising acceptance of data security among small- and medium-scale firms.

- The major trends that are responsible for the growth of the warranty management system market in the region include the growing number of smart devices and increase in the adoption of intelligent residential devices, which contain audio and video devices, as well as wearables and smart home devices, which creates the adoption of a warranty management solution to provide the best customer experience.

- Therefore, the proliferation of digital services and technological advancements, coupled with the early adoption of the latest technologies in various sectors, supplement the market growth in the region. The country is also experiencing many investments and technological advancements in warranty management systems. The adoption of a warranty management system in retail space is also emerging. There is a huge shift to organized retail to improve customer behavior experience through the application of analytics.

- Another major trend responsible for the growth of the warranty management system market in the region is the growing competition among various automobiles and manufacturing companies.

- The region's automotive sector is expected to offer significant opportunities for the market studied. With the changing dynamics in the industry, automotive manufacturers are moving toward electric vehicles to meet next-generation consumers' needs.

- The electric vehicle usage in the United States has risen rapidly, with an estimated 1% of the automotive sales in the US market being accounted for by electric vehicles. For instance, electric vehicle policies helped the United States cross one million in total sales in 2018. Automakers, such as General Motors, plan to launch 20 new all-electric vehicles by 2023. According to IEA, new registrations in Canada for plug-in hybrid electric cars reached 21.49 (in thousand) in 2018 from 1.40 (in thousand) in 2012.

Competitive Landscape

The warranty management systems market is competitive and consists of several major players. The major players with prominent shares in the market are focusing on expanding their customer base across foreign countries. The companies are leveraging on strategic collaborative initiatives to increase their market shares and profitability. Some of the recent developments in the market are:

- In July 2020 - EY and IBM announced an enhanced, global multi-year alliance primarily designed to help organizations accelerate their digital transformation and improve client outcomes, that includes leveraging the hybrid cloud capabilities of Red Hat OpenShift, as well as IBM Blockchain, IBM Watson, and IBM's 5G and edge technologies. Together, both the company's professionals plan to focus on helping the clients in modernizing and transforming their businesses.

- In June 2020 - IBM and SAP SE announced their partnership's next evolution, with their plans to develop multiple new offerings that are designed to create a more predictable journey for businesses to become data-driven intelligent enterprises.

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