Honda might be the one who will benefit from Hyundai-Kia fake fuel economy stats

Article by Christian Andrei, on November 19, 2012

Honda Motor Co., as well as other automakers, stands to benefit from the blunder committed by Hyundai Motor Co. and Kia Motors Corp. when they overstated their fuel economy ratings. Honda is now increasing sales of its new Accord sedan and at the same time, it is preparing to launch a modified Civic small car.

On the other hand, Hyundai and Kia are reeling from the impact of the U.S. Environmental Protection Agency finding out just how much they exaggerated their fuel economy. It can be recalled that at the 2010 Detroit auto, Honda was taken aback when Hyundai raised a banner to announce that it was America's most fuel-efficient.

Back then, Honda's U.S. sales chief pledged that it’s only motivated even more. Jake Fisher, director of automotive testing for Consumer Reports, said that the timing is “beautiful” for Honda as they had been perceived to have slacked in terms of fuel efficiency and have not kept up with the other automakers.

What Hyundai and Kia face now may put several automakers at an advantage. Fuel-efficient models are being promoted by Toyota Motor Corp., Nissan Motor Co. and Ford Motor Co. Nevertheless, Honda is likely to reap the most benefits. Strategic Vision, a consumer-research firm that surveys up to 350,000 carbuyers annually, said that for the next few months, Hyundai sales could decline by up to 11%.

Alexander Edwards, president of Strategic Vision's auto division, said that buyers frequently consider Honda's cars and sport-utility vehicles to be alternatives for Hyundai buyers, ahead of other brands. Jessica Caldwell, an analyst for Edmunds.com, the auto pricing and data Web site, said that Honda seems to be “an attractive brand known for fuel economy."

She thinks that while Honda will gain the most, Ford would also benefit. As gasoline prices increase, car buyers came to consider fuel economy more. In July 2008, the price of gasoline in the U.S. reached an average of $4.11 a gallon. Earlier this year, it also came near to the $4 level. Since U.S. regulations demand that automakers double vehicle efficiency by 2025, the industry will have to prioritize accurate, mileage ratings.

This month, the EPA said that new mileage labels will be placed on the majority of the 2012 and 2013 models of Hyundai and Kia, reducing average mile per gallon ratings by 1 to 2 miles for majority of the affected vehicles. The most overrated model is Kia's Soul wagon, which has to pull down its highway mileage label by 6 miles (9.7 kilometers) per gallon. The companies have apologized to customers and have offered pre-paid fuel cards to reimburse owners for the difference in ratings. So far, three lawsuits have been filed by customers for the overstated mileage claims.

Topics: honda, hyundai, kia

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