Sept. 6 (Bloomberg) -- General Motors Corp., the world's largest automaker, will extend warranties to 100,000 miles on 2007 cars and trucks as part of a plan to tout quality and win back buyers lost to Toyota Motor Corp. and other rivals.

The new warranty on engines and other powertrain parts is an increase from the current 36,000 miles, Chief Executive Officer Rick Wagoner said today in Detroit. It also will apply to 2007 models already sold, he said.

``If an automaker is standing behind their product, that's good,'' said Ron Tadross, an analyst with Banc of America Securities in New York. ``It's not a silver bullet. It won't be the big bang for their buck they think it is. It's just one of the many things they need to be doing.''

Wagoner is trying to emphasize value and rely less on incentives after Toyota and Hyundai Motor Co. grabbed U.S. market share last year, contributing to GM's $10.6 billion loss. Sales of redesigned models such as the Chevrolet Tahoe sport- utility vehicle helped GM post record revenue in the first half.

The warranty, which starts tomorrow, will run 100,000 miles or five years. It has no deductible, is transferable to new owners and applies to all new cars and light trucks sold in the U.S. and Canada. Detroit-based GM also will extend roadside assistance to 100,000 miles.

Warranty coverage for parts outside the powertrain, such as cupholders, remains at 36,000 miles.

Shares Rise

GM shares rose 73 cents, or 2.4 percent, to $31.17 at 4:19 p.m. in New York Stock Exchange composite trading. The stock has climbed 61 percent this year, the most of any company in the Dow Jones Industrial Average.

``It's a good move for General Motors to offer extended warranties,'' said Efraim Levy, a Standard & Poor's analyst in New York. ``Quality has improved overall in the industry, especially at General Motors. But the consumer doesn't realize it.''

Wagoner said GM would pay for the extra warranty expense with part of the $9 billion in savings it's achieved this year through job cuts and other changes. He didn't specify the cost other than to say that it was manageable.

The warranty program is part of an eight-month-old initiative to shift money from incentives and instead attract buyers with lower prices or added features at no extra cost, according to Mark LaNeve, GM's North American marketing chief.

Incentive Spending

GM's average incentive spending per vehicle in August fell 18 percent to $3,191, according to Autodata Corp. Ford Motor Co. spent $4,434, a 14 percent increase, while spending at DaimlerChrysler AG's Chrysler fell 13 percent to $3,474.

Wagoner has been under pressure to boost North American sales and profits after billionaire Kirk Kerkorian, GM's fourth- largest investor, urged the automaker on June 30 to consider an alliance with Renault SA and Nissan Motor Co.

The GM chief agreed with Renault and Nissan CEO Carlos Ghosn on July 14 to study the proposal for 90 days. Wagoner said GM's primary focus is his own restructuring plan and GM doesn't need an alliance to return to profit. Ghosn said today that Renault is hiring banks to review the proposed alliance and Nissan should follow soon, without naming the banks.

Warranty Advertising

GM will begin advertising the warranty during tomorrow night's National Football League season opener on NBC television with a campaign from Deutsch Inc., a unit of the Interpublic Group of Companies. GM executives were also in Miami, Los Angeles and Texas to promote the coverage, LaNeve said.

``It shows GM's management is aggressive, and it will get a lot of attention and visibility,'' said Tom Libby, an analyst with J.D. Power & Associates' Power Information Network. ``It will not only take the attention away from Ford, but Ford and Chrysler will have match.''

Ford on July 13 increased warranties on Ford and Mercury brand cars and trucks to five years or 60,000 miles, from three years or 36,000 miles.

Those changes were part of a broader Ford strategy ``to improve the overall value of our products to our customers,'' spokesman Jim Cain said. Ford is ``not forced to respond'' to GM's move, he said.

Chrysler ended a 3-year-old warranty program with its 2006 models that offered protection for seven years or 70,000 miles on its Chrysler, Dodge and Jeep brands. Chrysler's coverage is now 36,000 miles or three years, the industry standard.

The automaker dropped the longer warranty after surveys found that less than 10 percent of consumers knew about the coverage, Chrysler spokesman Kevin McCormick said.

The average automobile owner keeps a vehicle for 5.1 years and drives 12,000 miles annually, Libby said.

Warranty Repairs

Touting GM's quality, Wagoner said the number of warranty repairs at dealerships dropped 40 percent in the past five years. GM took a $300 million second-quarter gain from lower warranty costs, which led in part to operating profits more than three times analysts' estimates.

Four GM models topped their segments for durability compared with eight for Toyota in a J.D. Power study last month of 3-year-old cars and trucks. Among GM brands, Buick and Cadillac had fewer problems than the industry average, while Pontiac, GMC, Chevrolet and Hummer had more, the study found.

``GM has improved its quality, but not necessarily any faster than other players,'' said Chance Parker, executive director of product research at J.D. Power in Westlake Village, California. ``They have some models and makes that do well every year, but then that is tempered by some products that do terribly.''

To contact the reporter on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net

Last Updated: September 6, 2006 16:38 EDT