Car manufacturers underrate horsepower for a variety of reasons. The most common reason is that it helps to sell more cars. By underrating the horsepower, consumers will feel like they are getting a better deal on a car that actually has more power than they were expecting. Additionally, it allows manufacturers to save money on advertising and other marketing expenses. They can simply claim that their cars have more power without having to back it up with hard numbers.
There are also some safety concerns associated with overstating horsepower. If a car is advertised as having too much power, it could be involved in more accidents or get into trouble with the law. Finally, there is some evidence that suggestscar buyers don't really care about horsepower anyway. So, by understating the number, manufacturers may not be losing any potential customers.