By Mike Ramsey
Ford Motor Co. lowered the mileage ratings on six 2013 and 2014
models, mostly hybrids and plug-in electric hybrids, and said it
would pay owners as much as $1,050 to compensate for
underestimating fuel costs.
It was the second time within a year that the Dearborn, Mich.,
auto maker has admitted to overstating the mileage ratings on its
vehicles. The company said each time overstatements resulted from
errors conducting government-prescribed tests.
Hyundai Motor Co. and Kia Motors Corp. admitted in 2012 they had
overstated the fuel economy of more than a third of the vehicles
sold in the U.S. for the previous two years. The car makers also
agreed to reimburse customers, and blamed the overstatements on
testing errors.
One of the Ford vehicles, the C-Max hybrid, already had its
mileage rating lowered. The latest rating has fallen to a combined,
city/highway rating of 40 miles per gallon, down from 43 mpg. When
the C-Max was launched, Ford advertised it with a combined rating
of 47 mpg.
The rating change lets the air out of Ford's efforts to trumpet
its vehicles' fuel economy, particularly over Toyota Motor Corp.
When Ford launched its Fusion hybrid in late 2012, the company said
it far outstripped the fuel economy of the rival Camry hybrid,
which has a combined mileage of 41 mpg. Now the Fusion hybrid's 42
mpg rating is one notch higher.
The rating changes affects all of Ford's hybrids, including the
C-Max plug-in hybrid and Fusion plug-in hybrid as well as most 2014
model-year Fiesta subcompact cars.
Ford said it would compensate more than 200,000 customers who
bought these vehicles with payments of ranging between $125 and
$1,050 depending on which vehicle and whether it was leased or
purchased. The company wouldn't provide an estimate of the total
cost of the payouts.
The biggest restatement affected the 2013 and 2014 Lincoln MKZ
hybrid sedan. Previously advertised at 45 mpg in combined driving,
the car will be sold with a mileage rating of 38 mpg city, 37
highway. People who bought the car will get $1,050 back from
Ford.
"Fuel economy is very important to customers and to us. This was
our mistake, plain and simple. We've corrected our error and we are
taking steps" to prevent it from happening again, Raj Nair, Ford's
global product development chief, said during a conference
call.
Ford discovered the latest mistakes and reported them to the
Environmental Protection Agency, which regulates fuel economy
testing. The EPA said in a statement that it oversaw Ford's
re-testing of the vehicles, and conducted independent tests. The
agency and Ford said they have agreed to improved tests for future
vehicles, under EPA supervision.
Mr. Nair said Ford didn't pay fines to the EPA for the
mistakes.
"This issue highlights the need for continued strong oversight
of the fuel economy labeling program," said Chris Grundler,
director of EPA's Office of Transportation and Air Quality in a
statement. "Consumers need to trust that fuel economy window
stickers are giving consumers reliable and fair estimates of real
world fuel economy."
Ford said the payments would come from the company's warranty
reserve, but that the issue wasn't connected to the company's $400
million increase in the reserve announced during first quarter
earnings.
Ford wouldn't estimate the cost of the payments to customers,
which was based on a calculation of the difference between the
advertised rate and the change.
AutoPacific Inc. analyst Dave Sullivan said the Ford move could
influence other auto makers to be more conservative with their fuel
economy estimates. Hybrid vehicle buyers are more sensitive about
fuel economy than buyers of conventional cars, he said. "A couple
hundred dollars or some sort of monetary value isn't going to be
able to buy someone's trust."
Ford said the error occurred in the calculation used to
determine something called the "total road load horsepower," a
resistance measure on a machine called a dynamometer that is used
to test vehicle performance in a static, lab setting.
Mr. Nair said the correlation of wind-tunnel data to the
computer model was incorrect, creating too little resistance. That
led to a big disparity in results, particularly for the heavier
hybrid vehicles, such as the Lincoln MKZ hybrid, which had its fuel
economy reduced to a combined 38 mpg from a combined 45 mpg.
Ford said it confirmed the problem in its testing in March,
notified the EPA, and proceeded to retest its entire lineup of
vehicles using a new and modified formula.
Write to Mike Ramsey at michael.ramsey@wsj.com
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