Mitsubishi Motors admits manipulating fuel test data

Mitsubishi Motors Corp admitted to manipulating test data involving 625,000 vehicles in order to improve fuel-economy claims.

The affected models include those supplied to Nissan Motor Co, which discovered the manipulation, according to a statement by Mitsubishi Motors. The two companies are discussing compensation and Mitsubishi is also checking whether the cheating affected overseas models.

Mitsubishi Motors' shares fell the most in more than a decade in Tokyo trading, plunging 15 percent, after saying it improperly handled fuel economy tests, making the Japanese carmaker the latest in the auto industry to come under scrutiny for regulatory misdeeds. Mitsubishi Motors is suspected of manipulating the load placed on the tires of four different models in order to make their fuel economy performance appear better,citing an unidentified person. The company's manipulation of tests would further intensify scrutiny of the auto industry after Volkswagen AG's admission last year that it rigged diesel models with software to meet US emissions standards.

"This may be different from Volkswagen's issue, but the market has become very sensitive to such kind of news," Seiji Sugiura, an analyst at Tokai Tokyo Research Center, said by phone. "It may have a similar impact in terms of sales and the company's reputation." The plunge in Mitsubishi Motors's shares dropped its market value to 721 billion yen ($6.6 billion). An internal company probe revealed the mishandled testing involved four models including the eK minicar, Kyodo said. Mitsubishi Motors President Tetsuro Aikawa and two other executives bowed in apology at a briefing in Tokyo. Nissan, which rebadges the eK model and sells the car as the Nissan DayZ in Japan, declined to comment.

Mileage Misdeeds

Mitsubishi Motors's disclosure risks doing further damage to consumers' trust in car companies' fuel economy claims. Hyundai Motor Co. and Kia Motors Corp. agreed to pay fines and forfeit emissions credits in late 2014 to settle U.S. claims they overstated mileage ratings. Ford lowered ratings for hybrid models in both 2014 and 2013.

The Japanese automaker has been seeking to restore confidence in its vehicles for more than a decade after a series of scandals more than a decade ago led the carmaker to seek multiple bailouts from Mitsubishi group companies. Mitsubishi Motors had covered up defects involving flawed axles that could lead wheels to detach.

"It's again bad for the company's image," Sugiura said. "It's not the first time for Mitsubishi to have this kind of issue, and this definitely won't help them rebuild their reputation."