Warning over hybrid comparative advertising

Commerce Commission warns over hybrid comparative advertising

A car company has been warned by the Commerce Commission about comparative claims made in advertising for one of its hybrid vehicles.

Hyundai Motors New Zealand Limited used results from the 2007 World Solar Challenge for an advertising campaign that ran on billboards and on television during July and August 2008. The billboard claimed, "Cleans up hybrids. Less carbon emissions. More fuel efficient". The television advertisement claimed that the Hyundai i30 was more fuel efficient and emitted less carbon in comparison to another well known hybrid car. Both advertisements referred to the results for the Hyundai i30 motor vehicle in the 2007 World Solar Challenge.

"Many consumers are looking to purchase fuel efficient vehicles both to save on fuel costs and to reduce their impact on the environment. It is important that businesses supply consumers with accurate information so that they can make informed decisions about the type of vehicle that they purchase," said Adrian Sparrow, Commerce Commission Director of Fair Trading.

"Comparisons can help consumers judge the relative merits of competing products and choose the one that best suits their needs and budgets. Companies using comparisons as an advertising or marketing tool must ensure that the comparisons being made are accurate and must be comparing like with like. Comparisons must tell the full story and not leave out any information that is necessary for a true and fair comparison to be made," said Mr Sparrow. "Inaccurate comparisons risk misleading consumers and breaching the Fair Trading Act."

In the Greenfleet Technology Class of the 2007 World Solar Challenge two cars, the Hyundai i30 and the Audi A3 Sportback 1.9e, were driven conservatively by motoring professionals and returned very similar results. The other five cars in the class, including the Leaseplan Toyota Prius, were driven using an everyday driving style. The final results issued by the challenge organisers noted that technologies and driving styles of vehicles varied considerably, hence it was not possible to directly compare fuel efficiencies and greenhouse gas emissions between vehicles in that class. They also noted that some competitors were aiming to achieve the lowest emissions possible, while others were aiming to show what could be achieved by the average driver.

Motor industry experts have advised the Commission that it is almost impossible to accurately compare tests results by driving vehicles as the driving styles (even professional) will deliver different results on every occasion.

"The Commission believes that as no qualification about the differences in the technology and driving styles was included, the advertising was at risk of breaching the Fair Trading Act. The advertising campaign ran from 14 July to 24 August 2008. As the campaign was stopped as soon as the issue was identified and as Toyota New Zealand has filed High Court proceedings, the Commission considers that a warning is the most appropriate action at this time," said Mr Sparrow. "However, we will continue to monitor future representations made by Hyundai."
Background

The Fair Trading Act. Sections 10 and 13(e) of the Act state:

Section 10 - Misleading conduct in relation to goods

No person shall, in trade, engage in conduct that is liable to mislead the public as to the nature, manufacturing process, characteristics, suitability for a purpose, or quantity of goods.

Section 13 - False (or misleading) representations

No person shall, in trade, in connection with the supply or possible supply of goods or services or with the promotion by any means of the supply or use of goods or services,

(e) make a false or misleading representation that goods or services have any sponsorship, approval, endorsement, performance characteristics, accessories, uses or benefits;

Only the courts can decide if the Act has actually been breached. Breaches of the Fair Trading Act may result in prosecution in court. Companies found guilty of breaching provisions of the Fair Trading Act may be fined up to $200,000 and individuals up to $60,000.

Guidelines for Green Marketing can be downloaded from www.comcom.govt.nz under Fair Trading

World Solar Challenge results and further information can be downloaded from www.wsc.org.au

ENDS

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