If automakers wanted you to drive slower and safer, they would set the speedometer to read high- ie, it reports 60 when you're really doing 55. The upside is that your mpg may improve as well.
Yes, that is what they do and that is what i said they do. I just looked up what Volkswagen has to say about this: "To allow for possible differences in overall tire diameter with different tire manufacturers and wheel sizes, a factor is designed into the speedometer function that increases the displayed speed. "
And while the odometer isn't directly tied to the speedometer, they're usually driven by the same shaft- I've fixed both in several vehicles. Changing tire diameter will affect both. Changing shaft itself can affect both as well, but typically, the gears that break and need replacing are the ones connecting the shaft to the odometers/speedometers.
In my car, the speedometer is not a gear driven system at all. It uses magnetic pulses so once you have the pulses/sec, adjusting it is a matter of modifying the ECU. 500 pulses per second means I'm travelling 88 ft/sec or 60 mph.
As a matter of fact (at least on my GTI) the odometer uses the data reported via the CANBUS. The ECU processes this data and then sends it to the computer that displays your current mph. The distance impulse number used to calculate your speed can be changed in the ECU!
Aside- it's funny how legally you cannot roll back an odometer, but nothing legally prevents one from inserting a high ratio gear to report much lower mileage for future drives (not that I'd do that- I'm extremely careful about maintenance scheduling on my vehicles).
Actually that too is illegally here (Europe). I even had to get my speedometer and odometer verified by a professional when I changed my 15" rims to the new 19" ones.