When it comes to competition in the auto business, it’s the unknown that keeps the top U.S. Honda executive, John Mendel, up at night.

Mendel, speaking to the Reuters Auto Summit in Detroit, said he is always concerned about the conventional competitors. But what he is really afraid of is a company that “changes the game.”

“What keeps me up regarding new competition is someone significantly changing the game,” Mendel said.

People mention an autoseller taking up dealers dropped by General Motors, Chrysler or Saturn.

“What if they didn’t have a dealer network,” Mendel said. “What if they used big-box retailers and contracted with Jiffy Lube to have your car fixed?

“That could be a really new metric, which suddenly changes the whole cost structure for distribution significantly,” said the Honda executive.

That has been tried before, by Sears, in the 1950s, but was killed by the complex state franchise laws that protect dealership networks.

Would such an idea work if tried by the Walmarts or the Costcos of the world? Should the U.S. state franchise laws be changed to allow it?

Mendel was a featured guest at this year’s Reuters Autos Summit, which runs through Thursday in Paris and Detroit.

Green car owners have apparently complained in such large numbers that the Honda Civic Hybrid isn’t living up to high mileage claims that the carmaker has approached U.S. government regulators about revising its mileage guidelines, according to a lawsuit by one Honda hybrid owner.

A California appellate opinion filed on Monday showed that a Honda customer service representative told Gaetano Paduano, the dissatisfied owner of a 2004 Honda hybrid, that the company had received “a high number of complaints” that the sedan achieves significantly less than its promised mileage of 47-plus miles per gallon.

The rep also told Paduano that the company and rival Toyota have approached the U.S. EPA to change the mileage rating on their hybrid cars, the opinion said.

Another Honda rep told Paduano that he probably couldn’t achieve the advertised mileage by driving the vehicle like a conventional car, despite claims to the contrary in a Honda brochure advertising the vehicle, the opinion said. 

A Honda spokesman would not comment on the pending litigation. 

Paduano’s lawsuit, filed in 2005, follows at least one other legal action over low mileage complaints for the Honda Civic Hybrid, the other filed in U.S. District Court and decided last year.

The San Diego based appeals court ruled that Paduano can go ahead with his false advertising lawsuit against Honda in a California state court.