Auto industry frets about more fuel mileage fiascos like Hyundai's
By Bernie Woodall
LOS ANGELES (Reuters) - Hyundai Motor Co's (005380.KS: Quote) admission that it overstated fuel economy claims on several of its top-selling cars has the industry worried, with speculation rife among executives and analysts at the Los Angeles auto show that more automakers may have to do the same.
Four weeks ago, Hyundai and its affiliate Kia Motors Corp (000270.KS: Quote) conceded that they overstated the fuel economy by at least a mile per gallon on more than 1 million recently sold vehicles.
"I think we might see more of this," said Jake Fisher, the head of automotive testing at Consumer Reports. "There are other vehicles that don't really stack up to the EPA estimates."
Hyundai, which had centered marketing campaigns on superior fuel economy, says that so far its U.S. sales have not been affected by the admission. But it has had to implement a compensation campaign that Moody's Investors Service estimates could cost them $100 million a year until the cars are scrapped. It also faces lawsuits over the matter.
It only makes sense for the industry to come under scrutiny, said Gary Silberg, KPMG national auto industry leader.
"We're from an auditing firm. What you learn in auditing is that if you find one outlier you have to test some more," said Silberg. "It would be my guess that there are others."
Automakers too noted the pressure.
"I think every manufacturer did what we did and went back and said: 'Are these real numbers?'" said Al Castignetti, vice president of Nissan Motor Co's (7201.T: Quote) namesake brand in the United States. Continued...