GM halts some U.S. SUV sales after fuel economy overstated

[May 14, 2016]  By David Shepardson
 
 WASHINGTON (Reuters) - General Motors Co said on Friday it was temporarily halting sales of about 60,000 new 2016 U.S. SUVs because the vehicles' window labels overstated their fuel efficiency.

A spokesman for the largest U.S. automaker said GM discovered an "inadvertent error" on U.S. 2016 GMC Acadia, Buick Enclave and Chevrolet Traverse SUVs that caused the estimated fuel economy to be listed on the window label as 1-2 miles per gallon higher than it should have been. GM is stopping sales of the SUVs in dealer showrooms until a corrected label is placed on the vehicles.

Environmental Protection Agency spokeswoman Laura Allen said Friday the agency has been notified by GM that it is correcting fuel economy labels on the three 2016 SUVs. "We have asked the company to provide all relevant information to the agency," Allen said.

GM said Friday the rating for the vehicles on the EPA's fueleconomy.gov website was incorrect but has since been corrected. New labels are expected to begin showing up at dealerships soon.

The incident is the latest in a multitude of issues in recent years involving the auto industry overstating vehicle fuel efficiency.

Some automakers have previously compensated vehicle owners for overblown fuel economy ratings. Asked if GM will follow suit, GM spokesman Tom Wilkinson said the automaker "will contact owners of the affected models to address this situation."

Automotive News reported GM engineers discovered the error as they worked on the 2017 model label.

In April, Mitsubishi Motors Corp <7211.T> admitted to overstating the fuel economy of four small car models sold in Japan, including two under Nissan Motor Co's <7201.T> nameplate.

This week, Nissan agreed to buy a 34 percent controlling stake in Mitsubishi. Mitsubishi has said the overstatement didn't impact U.S. vehicles.

In 2014, Korean carmakers Hyundai Motor Co <005380.KS> and affiliate Kia Motors Corp <000270.KS> agreed to pay $350 million in penalties to the U.S. government for overstating fuel economy ratings in about 1.2 million vehicles. That was on top of $395 million they agreed to pay to resolve claims from vehicle owners.

In June 2014, Ford Motor Co <F.N> lowered the fuel economy ratings on six models and agreed to reimburse owners for the difference.

Ford cut ratings on its 2013 and 2014 model year hybrid and plug-in hybrid vehicles as well as most 2014 Fiesta cars. It was the second time Ford cut fuel ratings for the C-Max hybrid in under a year.

(Reporting by David Shepardson; Editing by Andrew Hay)

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