Ford Lowers Mileage Rating on C-Max Hybrid to 43 MPG

Ford Motor Co. (F), hit by lawsuits for coming up short on its fuel economy promises, lowered the mileage rating for its C-Max Hybrid model. The automaker will also make one-time payments to customers because of the change.

The rating for the 2013 model was revised to 43 miles (69 kilometers) per gallon for combined city and highway driving, Raj Nair, Ford’s global product development chief, said at a press conference in Dearborn, Michigan. Ford had advertised 47 mpg for the C-Max Hybrid.

“This is yet another sign that real-world fuel economy has to match manufacturers’ claims,” Karl Brauer, senior analyst at Kelley Blue Book, said in an e-mail. “Ford isn’t the first automaker to run into trouble here, but with today’s heightened level of accountability, maybe they’ll be the last.”

Ford has faced criticism and lawsuits for not delivering on the high-mileage promises of its hybrids. Consumer Reports magazine said Ford’s Fusion hybrid and the C-Max fell 17 percent to 21 percent short of the promised 47 mpg in its tests last year. The Dearborn-based automaker said in December it was talking to the U.S. Environmental Protection Agency about how it tests fuel economy on new vehicles.

“There are customers that are above the” 47 mpg number, Nair said. “There are customers that are below the number. We take the customers that are below the number very seriously.”

Photographer: Jeff Kowalsky/Bloomberg

Ford Motor Co. C-Max Energi plug-in hybrid vehicles sit parked after being driven off of the production line at the company's assembly plant in Wayne, Michigan. Close

Ford Motor Co. C-Max Energi plug-in hybrid vehicles sit parked after being driven off... Read More

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Photographer: Jeff Kowalsky/Bloomberg

Ford Motor Co. C-Max Energi plug-in hybrid vehicles sit parked after being driven off of the production line at the company's assembly plant in Wayne, Michigan.

Because of the mileage change, Ford said it will make a “goodwill payment” of $550 to customers who purchased a 2013 C-Max Hybrid and $325 to those who leased it. The automaker said the 2014 version, which goes on sale in December, will be more fuel efficient, without providing a specific figure.

Ford fell 0.8 percent to $16.30 at the close in New York. The shares have climbed 26 percent this year, compared with a 16 percent gain for the Standard & Poor’s 500 Index.

C-Max Owners

Some 32,000 C-Max owners are eligible for the payments, according to Ford. If all had purchased their vehicles, the company’s cost would be $17.6 million.

Last month, the carmaker said it was informing owners of the C-Max, Fusion and Lincoln MKZ hybrids that they could upgrade their software at dealerships to improve mileage.

The upgrades are designed to boost mileage in real-world driving conditions such as those simulated by Consumer Reports. In those 2012 tests, the C-Max hybrid achieved 37 mpg in combined city and highway driving.

The EPA plans to update its fuel-economy labeling rules to adapt to new technology, according to an e-mailed statement.

CEO’s Cornerstone

Chief Executive Officer Alan Mulally has made fuel economy a cornerstone of his turnaround of the automaker since he arrived from Boeing Co. in 2006. Regulations in the U.S., Europe and Japan have pushed carmakers to offer more vehicles that don’t emit climate-warming gases and consume less fuel.

Ford’s move follows similar mileage revisions in November by Hyundai Motor Co. (005380) and Kia Motors Corp. (000270), which relabeled most of their top-selling U.S. models after discovering testing errors made in South Korea.

The Seoul-based affiliates, which share engines, model platforms and a chairman, relabeled window stickers on their cars and trucks to comply with U.S. EPA guidelines, and issued debit cards to buyers of about 900,000 vehicles sold in the U.S. in 2011 and 2012 to reimburse them for higher-than-expected fuel expenses.

To contact the reporters on this story: Keith Naughton in Dearborn, Michigan at knaughton3@bloomberg.net; Megan Durisin in Dearborn, Michigan at mdurisin@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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