MPG revisions undercut Ford marketing
Automaker, dealers pushed fuel economy and electrification
Ford Motor Co. faces new challenges to its ambitious effort to become the industry's fuel economy leader after revising mpg numbers downward on six models this week.
Affected models are the 2014 Ford Fiesta; the 2013 and 2014 hybrid and plug-in hybrid versions of the Fusion and C-Max; and the 2013 and 2014 Lincoln MKZ Hybrid.
"This will have a backlash," said Jim Seavitt, owner of Village Ford in Dearborn, Mich. "It happened once already, and it's very disappointing to see it happen again."
Last summer's restatement on the C-Max Hybrid already put a dent in C-Max sales. This time the restatement will have a broader impact on the company, which has put fuel economy at the heart of its marketing strategy and has made vehicle electrification a top priority in product development.
Most of the changes are between 1 and 5 mpg, but the MKZ Hybrid's combined city and highway estimate will be reduced 7 mpg, from 45 mpg to 38 mpg. That's bad news for the struggling Lincoln brand. The MKZ Hybrid accounts for 33 percent of MKZ sales and 14 percent of Lincoln's sales overall.
Last year Lincoln began an ad campaign touting the MKZ Hybrid as "the most fuel-efficient luxury hybrid in America." Lincoln took aim at the Lexus ES 300h. With the restatement, the 300h now bests the MKZ Hybrid, 40 mpg to 38 mpg.
With a new generation of hybrids and plug-in vehicles, Ford has built its advertising campaigns around mpg, taking particular aim at rival Toyota. And Ford has spent millions of dollars building its engineering capability to develop batteries and electronic powertrains.
In 2012, Ford announced it was doubling its team of vehicle electrification engineers to 1,000 and converting its 285,000-square-foot Advanced Engineering Center in Dearborn entirely to electrified vehicle development.
And dealers spent thousands of dollars to train employees to become certified to sell Ford's Fusion Energi and C-Max Energi plug-in hybrids, both of which had their mileage restated. At last count, about 900 of Ford's more than 3,000 dealers had signed up to be certified, a process that required employee training, an energy assessment and installation of electric charging stations.
"Dealers are very disappointed to see this happen," Seavitt said.
The dealer said he cleared out most of his C-Max inventory in the last couple of weeks with the help of a Ford incentive. Seavitt said he doubts he will be stocking any more anytime soon with this latest news.
O.C. Welch, a Ford-Lincoln dealer in Hardeeville, S.C., said: "That's the No. 1 thing hybrid and Energi customers are complaining about. They ask: 'How do you get it to get the mileage on the window stickers?'"
Welch said last summer's C-Max restatement virtually stopped sales of the vehicle on his lot.
"I've got 24 C-Maxs in stock," he said. "We took half of them and made service loaners out of them. Those things have been grazing on the grass 24 hours a day, seven days a week, for eight, nine, 10 months."
Ford said this week it had identified an error in its testing procedures and notified the EPA and worked with the agency to revise the ratings.
Ford announced it will make payments to about 200,000 affected customers ranging from $125 to $1,050, depending on the model and whether a customer leased or purchased the vehicle. The company would not estimate the total cost of the reimbursement program.
"This was our mistake, plain and simple, and we apologize to our customers for it," Raj Nair, group vice president for global product development at Ford, told journalists last week.
Eric Ibara, director of residual values for Kelley Blue Book, said the latest downward restatement would mean a difference of about $100 a year for C-Max Hybrid owners and $200 for Lincoln MKZ Hybrid owners based on 15,000 miles of driving and $3.50 a gallon gasoline.
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