The shares of Mitsubishi Motors Corp were down more than 15 percent and more than $1.2 billion were whipped off its market value on Wednesday after the auto maker admitted to manipulating test data to overstate the fuel economy of 625,000 cars sold in Japan.
After Nissan Motor, which markets a similar model made by Mitsubishi, found a discrepancy in fuel efficiency test data, the automaker said it stopped making and selling its eK mini-wagons for the domestic market.
The fuel economy levels were up to a tenth lower than stated in its test results for models made for the local market, said Mitsubishi Motors. In order to gain a favorable reading for its fuel economy certification, the company had manipulated those levels.
Fuel economy has become a major factor for environmental- and cost-conscious buyers as global emissions regulations tighten.
Apologizing for what is the biggest scandal at Mitsubishi Motors since a damaging defect cover-up over a decade ago, Tetsuro Aikawa, the president of Japan's sixth-largest automaker, bowed at a news conference in Tokyo.
"We'd like to apologize for the issue. The focus right now is to resolve this problem and prevent it from happening again ... it could be quite damaging," Aikawa said.
In the stock's biggest one-day drop in almost 12 years, shares in Mitsubishi Motors closed down more than 15 percent at 733 yen. Shares in Nissan closed down 1 percent.
625,000 vehicles produced since mid-2013 were involved in the test manipulation, said Mitsubishi Motors. 468,000 cars it made for Nissan, which markets them as the Dayz and its eK mini-wagon are included in it.
The manufacturer admitted intentionally falsifying the data, said Nissan, which has sold 450,000 of its Mitsubishi-made Dayz since 2013. It said that it would not comment on how the issue might impact the development of updated models and it had no plans to change its relationship with Mitsubishi Motors for now.
Mitsubishi said it would examine other models made for global markets to verify their fuel economy levels.
It measured how much they slowed per second rather than the time it takes to slow by 10 kms (6.2 miles) per hour, as required under Japanese regulations, in calculating its cars' fuel efficiency, the company said. The company also used a different testing system from other Japanese automakers and manipulated the equipment used to measure a car's rolling resistance during fuel economy tests.
Japan's Transport Ministry said it would decide on its response to that report by May 18 as it ordered Mitsubishi Motors to submit a full report on the test manipulation within a week.
"We are disappointed this has occurred and regret that an incident like this can also happen in Japan," said Takao Onoda, director at the ministry's recall division.
In 2000, Mitsubishi Motors had admitted that it covered up safety records and customer complaints. It admitted to broader problems going back decades four years later. It was Japan's worst automotive recall scandal at the time.
Since Volkswagen was discovered last year to have cheated diesel emissions tests in the United States and elsewhere, Mitsubishi Motors, which has annual sales of just over 1 million cars, is the first Japanese automaker to report misconduct involving fuel economy tests.
(Source:www.reuters.com)
After Nissan Motor, which markets a similar model made by Mitsubishi, found a discrepancy in fuel efficiency test data, the automaker said it stopped making and selling its eK mini-wagons for the domestic market.
The fuel economy levels were up to a tenth lower than stated in its test results for models made for the local market, said Mitsubishi Motors. In order to gain a favorable reading for its fuel economy certification, the company had manipulated those levels.
Fuel economy has become a major factor for environmental- and cost-conscious buyers as global emissions regulations tighten.
Apologizing for what is the biggest scandal at Mitsubishi Motors since a damaging defect cover-up over a decade ago, Tetsuro Aikawa, the president of Japan's sixth-largest automaker, bowed at a news conference in Tokyo.
"We'd like to apologize for the issue. The focus right now is to resolve this problem and prevent it from happening again ... it could be quite damaging," Aikawa said.
In the stock's biggest one-day drop in almost 12 years, shares in Mitsubishi Motors closed down more than 15 percent at 733 yen. Shares in Nissan closed down 1 percent.
625,000 vehicles produced since mid-2013 were involved in the test manipulation, said Mitsubishi Motors. 468,000 cars it made for Nissan, which markets them as the Dayz and its eK mini-wagon are included in it.
The manufacturer admitted intentionally falsifying the data, said Nissan, which has sold 450,000 of its Mitsubishi-made Dayz since 2013. It said that it would not comment on how the issue might impact the development of updated models and it had no plans to change its relationship with Mitsubishi Motors for now.
Mitsubishi said it would examine other models made for global markets to verify their fuel economy levels.
It measured how much they slowed per second rather than the time it takes to slow by 10 kms (6.2 miles) per hour, as required under Japanese regulations, in calculating its cars' fuel efficiency, the company said. The company also used a different testing system from other Japanese automakers and manipulated the equipment used to measure a car's rolling resistance during fuel economy tests.
Japan's Transport Ministry said it would decide on its response to that report by May 18 as it ordered Mitsubishi Motors to submit a full report on the test manipulation within a week.
"We are disappointed this has occurred and regret that an incident like this can also happen in Japan," said Takao Onoda, director at the ministry's recall division.
In 2000, Mitsubishi Motors had admitted that it covered up safety records and customer complaints. It admitted to broader problems going back decades four years later. It was Japan's worst automotive recall scandal at the time.
Since Volkswagen was discovered last year to have cheated diesel emissions tests in the United States and elsewhere, Mitsubishi Motors, which has annual sales of just over 1 million cars, is the first Japanese automaker to report misconduct involving fuel economy tests.
(Source:www.reuters.com)
