Ford to lower fuel economy rating on C-Max hybrid

Ford Motor Co. will reduce the stated fuel-economy rating of its C-Max Hybrid car -- a rare and potentially costly move that Ford spent months feverishly working to avoid.

A Ford source with knowledge of the plan confirmed the company will announce the move on Friday. A company spokesman had no comment Thursday afternoon.

Ford has faced heavy criticism and lawsuits about worse-than-expected fuel economy for several new models, including the C-Max, whose window stickers have advertised 47 mpg for city, highway and combined driving. The ratings are based on tests Ford conducted and data it submitted to the EPA.

Ford is the second automaker to back down on lofty fuel-economy claims in the past year under pressure from the EPA. Hyundai and its Kia affiliate in November agreed to change the labels on most of their models after the agency discovered that the brands had submitted flawed results for one of the tests used to calculate fuel economy numbers.

All four of Hyundai and Kia nameplates that had been advertised as getting 40 mpg in highway driving received new labels showing 36 to 38 mpg.

The EPA did not respond to e-mail and phone messages requesting comment.

Ford's move shows the high stakes surrounding fuel economy in today's car market, where buyers are more sensitive to high gasoline prices and the Obama administration is requiring automakers to meet stricter mileage standards.

Cutting the C-Max Hybrid mileage ratings is a blow to Ford's carefully cultivated image as a fuel economy leader, a core tenet that CEO Alan Mulally has emphasized since joining the company in 2006.

Ford used the 47-mpg number as the centerpiece of its C-Max advertising. Beginning in October, it aired a series of playful animated ads that pitted the C-Max against the rival Toyota Prius V. In addition to better fuel economy, Ford boasted the C-Max was more fun to drive than the Prius, as well.

But Ford's mileage claims soon ran up against the real-world experiences of customers. At least two class-action lawsuits were filed against the company on behalf of consumers who alleged that Ford misled them with fuel economy claims.

One of the suits, filed in California, was dropped in February. Another suit, filed in Massachusetts, is awaiting a hearing.

The Ford Fusion and C-Max hybrids fell 17 percent to 21 percent short of Ford's promise of combined 47 mpg in testing last year by Consumer Reports magazine, which uses a different testing cycle than the EPA. The Fusion achieved 39 mpg and the C-Max averaged 37 mpg in tests of city and highway driving, the magazine found.

Other hybrids also fell short of their manufacturers' claims, Consumer Reports said, but none more so than the C-Max and Fusion.

UPDATE: Ford has announced it will offer one-time rebates of $550 to C-Max hybrid purchasers and $325 to lessees to compensate for real versus advertised fuel economy.

Ford went on the offensive and promised to cooperate with the EPA to find a better testing standard for hybrids. Nair acknowledged in December that customers' fuel economy could vary depending on factors such as weather and individual driving style. He also said the C-Max had been set up to emphasize sporty driving.

"It is important to note that we have designed our hybrids to drive exactly the same as all our other vehicles, with the global Ford DNA," Nair said. "A key part of that DNA is 'fun to drive.' We could have detuned the vehicles to maximize fuel economy like some of our competitors have done, but it would have been at the expense of a fun driving experience."

Nair said he "consistently" achieves the stated ratings on Ford's hybrids when he drives in a manner to maximize efficiency but admitted "that's not the way I usually drive."

Last month, Ford said it planned software modifications for 2014 to improve the fuel economy of its hybrids. The changes include increasing the maximum speed the cars will go on electric power only, adjusting automatic grille shutters to reduce drag and adjusting electric fans and climate control systems to lower energy consumption.

U.S. sales of the C-Max this year have totaled 23,040 through July -- helping to boost Ford Motor Co.'s U.S. share of the alternative-powered vehicle market to 15 percent through July from 4 percent in the same period last year.

Alec Gutierrez, a senior analyst at researcher Kelley Blue Book, said that sales of the C-Max may temporarily dip, but he expects the relabeling to have little effect on Ford's overall sales. Hyundai and Kia sales have remained steady since last year, despite those brands' relabeling push.

Gutierrez said the bigger challenge for Ford will be deciding how to treat C-Max owners, and whether to reimburse them, as Hyundai and Kia did. It would be a less expensive proposition because far fewer C-Max hybrids have been sold.

"They can't fall short of Hyundai and Kia's response," Gutierrez said. "They're going to have to take care of those consumers who bought the car -- and perhaps made the choice to not buy a Prius, or some other hybrid, because of Ford's lofty claims."

The story "Ford to lower fuel economy rating on C-Max hybrid" originally appeared on Automotive News

By Gabe Nelson and Nick Bunkley- Automotive News